We will consider a closed economy, no exports or imports. In this economy: autonomous consumption is $3 trillion, autonomous investment is $1.5 trillion, autonomous government spending is $2 trillion, taxes are $3 trillion, d=.2, mpc=.5, and f=1.5)

a) derive the IS curve (I think the equation for this is…        Y=(C+I+d*f+g+NX-mpc*T) *\frac{1}{1-mpc}-\frac{d+x}{1-mpc}*r    )

c) suppose we are at a point below the IS curve. Is the goods market equilibrium, if not how can it reach equilibrium?

d) suppose the MP curve is r= 2 + .5 * π, derive the AD curve  

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