Calculate consumption and investment

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Suppose that monetary policy is implemented to stabilize output. Find the new level of money supply that will allow the economy to maintain the same level of output with increased taxes. Calculate the new values for Y, i, E, C, I, and TB.
Using the IS?LM?FX model, illustrate how the combination of the tax increase and monetary stabilization policy affects the economy. Comparing the numerical values you found in (g) with those from (d), are your answers consistent with the diagram?

(g) was Suppose that monetary policy is implemented to stabilize output. Find the new level of money supply that will allow the economy to maintain the same level of output with increased taxes. Calculate the new values for Y, i, E, C, I, and TB.

(d) was Find the equilibrium (home) interest rate, i, and the equilibrium (home) output, Y. Calculate consumption, investment, trade balance, and exchange rate at the economy's equilibrium."

Reference no: EM133486745

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