Question: Consider the following economy: Desired consumption 1275 + 0.5(Y- T) Desired investment / d = 900 - 200r. Real money demand L = 0.5K-

Consider the following economy: Desired consumption 1275 + 0.5(Y- T) Desired investment / d = 900 - 200r. Real money demand L = 0.5K- 200i. Full-employment output Y = 4600. Expected inflation = O. - 200r. (a.) Suppose that T = G = 450 and that M = 9000. Find an equation describing the IS curve and Find an equation describing the LM curve. Finally, find an equation for the aggregate demand curve. What are the general equilibrium values of output, consumption, investment, the real interest rate, and price level? Suppose that T = G = 450 and that M = 4500. What is the equation for the aggregate demand curve now? What are the general equilibrium values of output, consumption, investment, the real interest rate, and price level? Assume that full employment output Y is fixed.

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