sin cole An economy is described by the following equations: Desired consumption cd = 150 +0.5(Y-T) - 500r Desired investment Id = 100 - 500r Real money demand L = 0.5Y - 1,000r Money supply M = 1,400 Full-employment output Y= 500 Government purchases G = 250 Taxes T=250 Assume that expected inflation is zero so that money demand depends directly on the real interest rate. a. Calculate the long-run general-equilibrium values of: Output (Y): ☐ The real interest rate (r): ☐ (round to three decimal places) The price level (P): (round to two decimal places) Investment (I): ☐ (round to two decimal places)

sin cole An economy is described by the following equations: Desired consumption cd = 150 +0.5(Y-T) - 500r Desired investment Id = 100 - 500r Real money demand L = 0.5Y - 1,000r Money supply M = 1,400 Full-employment output Y= 500 Government purchases G = 250 Taxes T=250 Assume that expected inflation is zero so that money demand depends directly on the real interest rate. a. Calculate the long-run general-equilibrium values of: Output (Y): ☐ The real interest rate (r): ☐ (round to three decimal places) The price level (P): (round to two decimal places) Investment (I): ☐ (round to two decimal places)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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