Desired consumption is Cd = 100 + 0.8Y - 500r - 0.5G, and desired investment isId = 100 - 500r. Real money demand is Md/P=Y - 2000i. Other variables are ne = 0.05,G= 200, Y = 1000, and M=2100.a. Find the equilibrium values of the real interest rate, consumption, investment, and theprice level.

Given: Desired Consumption- Cd = 100+0.8Y-500r-0.5G Desired Investment- Id = 100-500r Real Money…

Desired consumption is Cd = 100 + 0.8Y - 500r - 0.5G, and desired investment is Id = 100 - 500r. Real money demand is Md/P = Y - 2000i. Other variables are re = 0.05, G= 200, Y = 1000, and M= 2100. %3D %3D a. Find the equilibrium values of the real interest rate, consumption, investment, and the price level.

Desired consumption is Cd = 100 + 0.8Y - 500r - 0.5G, and desired investment is Id = 100 - 500r. Real money demand is Md/P = Y - 2000i. Other variables are re = 0.05, G= 200, Y = 1000, and M= 2100. %3D %3D a. Find the equilibrium values of the real interest rate, consumption, investment, and the price level.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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