420worksheet20 - above b If this country wants to peg the...

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ECON 420-002 and 004, Fall 2008 Worksheet 20 1. Consider the following IS-LM model: IS*: Y = 2000-800e LM*: M/P =0.5Y-100r* r*=4, M=1000, P=2 a. What will be the equilibrium exchange rate according to the IS* and LM* equations
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Unformatted text preview: above? b. If this country wants to peg the exchange rate at e=0.15, what should the monetary authorities do?...
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