3- Classical Model: The Long Run 1.1 Open Economy Solve for the following
Y, W P , L, C, I, Nx, r, i, Md ,
when 3. Investment increases
answer key
1. Y , ¯ ¯ (W/P), L¯
2. I ?? r ?? C ?
3. r ?? CF ?? e ?
4. r ?? i ?? Md ?? P ?
5. e, P ?? E ?? Nx ?
Explain in as much detail as possible. (Just like we did in class)
Nx = net expoet
r= real interst
i= nominal interst
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