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3- Classical Model: The Long Run 1.1 Open Economy Solve for the following Y, W P...

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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