The AA-DD Model under Floating Rates
Note that in this model, investment is dependent on the interest rate.  Otherwise, the equations should look standard.
A. Floating Rates - Temporary Shocks:
restart;
GOV:=1900; TR:=0.20;
MS:=5000; P:=100;
FP:=200; FY:=60000; FR:=0.06; 
FE:=0.50;
AD1:={
 CON=0.80*(Y-TAX),
 TAX=TR*Y,
 INV=2400-10000*IR,
 CAB=300*ER*FP/P+0.02*ER*FY-0.1*Y,
 Y=CON+INV+GOV+CAB,
 MS/P=0.62*Y/P-200*IR, 
 IR=FR+FE/ER-1 
};
AD1result:=solve(AD1, {Y, ER, IR, CON, INV, TAX, CAB});
B.  Floating Rates - Permanent Shocks:
restart;
GOV:=1900; TR:=0.20;
MS:=5000; P:=100;
FP:=200; FY:=60000; FR:=0.06;
AD2:={
 CON=0.80*(Y-TAX),
 TAX=TR*Y,
 INV=2400-10000*IR,
 CAB=300*ER*FP/P+4*ER*FY/FP-10*Y/P,
 Y=CON+INV+GOV+CAB,
 MS/P=0.62*Y/P-200*IR, 
 IR=FR+FE/ER-1,
 FE=ER
};
AD2result:=solve(AD2, {Y, ER, FE, IR, CON, INV, TAX, CAB});
Variable Names:
Y - nominal GDP
CON - consumption
INV - private investment
GOV - government purchases
CAB - current account balance, or net exports
TAX - net tax revenue
TR - tax rate
MS - money supply
P - price level
IR - interest rate
ER - exchange rate
FE - forward exchange rate 
FY - foreign nominal GDP
FP - foreign price level
FR - foreign interest rate
Assignment:

1)  Using Maple, solve for the above two models.  Because the system is nonlinear in some variables (i.e., the exchange rate ER), there may be more than one set of solutions, and you will need to pick the right set.  You will know which is which by the solution values.

First, solve for the initial equilibrium.  Then in each case:

a) Increase GOV from 1900 to 2000.
b) Increase MS from 5000 to 5500. 
2)  In each of the above cases, explain your results with words and appropriate graphs (i.e., the E-R-M and AA-DD models), and explain the directional change of the main endogenous variables (Y, IR, ER, CAB).  In which cases did having endogenous investment change the predictions of the model, relative to the version of the AA-DD model taught in class?