MORE PROBLEMS AND APPLICATIONS

1. Let’s consider more special cases of this large model. Starting with the large model, what extra assumptions would you need to yield each of the following models?

   1. The model of the classical large open economy in the appendix to Chapter 5

   2. The Keynesian cross in the first half of Chapter 10

   3. The IS–LM model for the large open economy in the appendix to Chapter 12