An open economy is described by the following equations:

a. Write the equation for the aggregate demand curve. (Find the equations describing goods market equilibrium and asset market equilibrium. Use these two equations to eliminate the real interest rate. For any given price level, the equation of the aggregate demand curve gives the level of output that satisfies both goods market equilibrium and asset market equilibrium.)
b. Suppose that P =18. What are the short-run values of output, the real interest rate, consumption, net exports, and investment?
c. What are the long-run equilibrium values of output, the real interest rate, consumption, investment, net exports, and the price level?

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Desired consumption C 120+0.5Y T)-200r Desired investment Net exports Government purchases G-100. Taxes /d = 120-200r. NX # 60 + 0.05,or-100r. T 100. Real money demand Money supply Foreign output Full-employment output 0.8Y200 M=10800. YPor 1000. 700.