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a Suppose you are the TA of Econ 3602 and one student does not know how to derive the DD schedule. Show this student how to derive the DD schedule. Support your answer with equations and gures.
b One week later the same student comes to your oce hours and now asks you to derive the AA schedule. Show this student how to derive the AA schedule. Support your answer with equations and gures.
c Suppose the economy is in full employment and suddenly there is a fall in the foreign price level (P). What would happen to output and the current account (net exports) in this economy?
Which type of financing is appropriate to each firm?
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