Consider the following IS-LM model:
(1 - b)Y + i1r - a - G = i0 - bT (1)
c1Y = Ms + c2r (2)
where Y and r are the endogenous variables. Solve for Y and r using matrix algebra.
How are these equilibrium values affected by increases in Ms? Increases in T? (i.e.
nd the comparative statics)
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