The world interest rate is r* = 0.043 that is 4.3 percent and for a certain small economy, the following information applies:
C = 2,000 + 0.8(Y-T),
I = 6500 - 2,000r
NX = 2600 - 200ε
G = 3,226
T = 5000
L = 30,000 + 0.7Y - 22000r
M = 64,054
P = 1
a. Find the equation of the IS* curve
b. Find the equation of the LM* curve
c. Find the equilibrium values of Y and ε
d. Verify that S - I = NX at the equilibrium.