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Consider a closed economy where both the goods market and the money market are in equilibrium. The equilibrium in the goods market is represented by the IS equation and the information on the goods market is as follows: C=400 0.8 Yd, I=600- 10 r, G=200, R=125, and T=0.25 Y. The equilibrium in the money market is represented by the LM equation and the information on the market is as follows: (m)/(p)= 50 0.1 Y-5 r, and m̅=900.a. Derive the aggregate demand curve of the economy. (4)b. Let G increas
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