Question: This is a problem about the multiplier. Let's go a bit beyond PI-LC-H and assume that C/Y= a c + 0.5 Y Also, suppose that

This is a problem about the multiplier. Let's go a bit beyond PI-LC-H and assume that C/Y= a_c + 0.5Y

Also, suppose that we estimate that Y=400 and that at the current time R_t=r

Now suppose that due to war, exports fall and now bar a = -0.03. Suppose that the real interest rate is unchanged. Find the new level of short-run output (Y tilde) and actual output.

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