Assume that GDP (Y) is 6,000. Consumption (C) is given by the equation C= 600+ 0.6(Y – T). Investment (I) is given by the equation I= 2,000 – 100r, where r is the real rate of interest in percent. Taxes (T) are 500 and government spending (G) is also 500. What are the equilibrium values of C, I, and r?
Assume that GDP (Y) is 6,000. Consumption (C) is given by the equation C= 600+ 0.6(Y – T). Investment (I) is given by the equation I= 2,000 – 100r, where r is the real rate of interest in percent. Taxes (T) are 500 and government spending (G) is also 500. What are the equilibrium values of C, I, and r?
Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?
Section9.A: The Simple Algebra Of Income Determination And The Multiplier
Problem 4TY
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![Assume that GDP (Y) is 6,000. Consumption (C) is given by the equation
C= 600+ 0.6(Y- T). Investment (I) is given by the equation I= 2,000 – 100r, where r is
the real rate of interest in percent. Taxes (T) are 500 and government spending (G) is also
500.
What are the equilibrium values of C, I, and r?
What are the values of private saving, public saving, and national saving?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6944c2c9-571a-452f-9a35-92e88621d826%2F2735d59c-09da-4267-a0c8-87eb623888c3%2Fs0qieeu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Assume that GDP (Y) is 6,000. Consumption (C) is given by the equation
C= 600+ 0.6(Y- T). Investment (I) is given by the equation I= 2,000 – 100r, where r is
the real rate of interest in percent. Taxes (T) are 500 and government spending (G) is also
500.
What are the equilibrium values of C, I, and r?
What are the values of private saving, public saving, and national saving?
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