Read the following data on the economy of Angoia and answer/respond to the questions/instructions that follow. Unless otherwise stated, the monetary figures are in real billions of currency units (cu). Report all the calculations to four decimal places. Illustrate quantitatively and graphically (with sketches) all pertinent adjustment processes and methodological procedures in all your responses. Details may be relegated to appendixes. Accuracy is paramount.
Note: Yf = cu25, 850 is average real GDP of Angonia's export market countries and the price level is fixed and indexed at 150.
(a) Using the information given above, construct the general algebraic and quantitative expressions for the IS, LM and aggregate demand functions/equations.
(b) Solve for the initial equilibrium values of all the relevant endogenous variables of the model.
(c) Plot (sketch) the GB and CA as functions of domestic income and show the positions/outcomes of their gaps (surplus/deficit) at the equilibrium income. At what level of income are these gaps equalized?