**Question 31**In year 2018, the government of Qatar spent is 143 billion Qatari Riyal (the national currency of Qatar). The GDP of Qatar in the same year is 1,121 billion Qatari Riyal. Qatar’s desired consumption and desired investment during the year can be summarized by the following equations:\[ C^d = 1,000 - 5,000r, \]\[ I^d = 800 - 3,000r, \]where $ C^d $ is the desired consumption in billions of Qatari Riyal, $ I^d $ if the desired investment in billions of Qatari Riyal, and $ r $ is the real interest rate in decimal form.What is the equilibrium real interest rate, $ r* $, in %? Round your answer to at least 2 decimal places. (E.g. 12.3456% should be entered as 12.35)[Text box for the answer]

Answered: In year 2018, the government of Qatar…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Step 1

GDP (Gross Domestic Product) is the final value of all the goods and services produced and sold in an economy within a particular span of time. a closed economy is an economy that does not involve in trade. Thus, the formula for GDP (for a closed economy) is:

$G D P = C +! + G$

Where,

GDP is the final value of goods and services produced

C is the total consumption by the households

I is the total investment by the firms

and G is the total government spending

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