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Assume a comsumer with the utility function
U = U(x,y) = (X + 2)(Y + 1)
and the budget constraint
M = PxX + PyY
a. Set up the constrained maximization problem, and derive the firsr-order conditons.
b. Derive the demand for X and Y.
Answer the following questions as these general questions pertain to the specific issue selected.The questions that you will cover with respect to your choice of broad social issue in the paper are given.
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The traditional Keynesian model, explain how contractionary monetary policy would affect equilibrium aggregate output and the price level.
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