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    y = c(r, y - t) + I(r) + g
    M/P = L(i, y)
    n = (f^-1)(y)
    n^s(W/P) = n
    The endogenous variables are: y, n, W, and i.
    The exogenous variables are: pie^e, g, P, t and M.

    For this model derive the comparative static results showing the qualitative effects on this model economy of a fully anticipated balanced-budget contraction of government expenditure.Use Cramer’s Rule to help solve.
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Updated: September 29, 2011

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