The AA-DD Model Under Fixed Rates
Note that in this model, investment is dependent on the interest rate.  Otherwise, the equations should look standard.
restart;
GOV:=1900; TR:=0.20;
P:=100;
FP:=200; FY:=60000; FR:=0.06; 
ER:=0.50; FE:=0.50;
AD3:={
 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 
};
AD3result:=solve(AD3, {Y, MS, 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 model.  Again, there may be more than one set of solutions, and you will need to pick the right set.

First, solve for the initial equilibrium.  Then:

a) Increase GOV from 1900 to 2000.
b) Increase both ER and FE from 0.50 to 0.55.
c) Increase only FE from 0.50 to 0.55.
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, CAB).  In which case did having endogenous investment change the predictions of the model, relative to the AA-DD model taught in class?

3)  Compare your results with those from the previous Maple homework.