420worksheet19

420worksheet19 - c. What is the output? Equilibrium...

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ECON 420-002 and 004, Fall 2008 Worksheet 19 Consider the following model: C=200 + 0.75(Y-T) I=900-10(r*+θ) G=T=100 NX=100-20e r*=5 θ = 2 (M/P)=0.5Y-100(r*+θ) M=900, P=2 a. Find the IS* equation. b. Find the LM* equation.
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Unformatted text preview: c. What is the output? Equilibrium exchange rate? Consumption? Investment? Net Exports? d. Now suppose the risk premium increases to 5, what is your answer to a, b, and c?...
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This document was uploaded on 10/28/2011 for the course ECON 420 at UNC.

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