Question: Suppose we are given the following information: C = 150 + .75(Y - T)I = 200 - 40rG = T = 200 Derive the economy's

Suppose we are given the following information:

C = 150 + .75(Y - T)I = 200 - 40rG = T = 200

Derive the economy's real IS curve. Explain why the real IS curve depends on the real interest rate, r, and not on the nominal rate.

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