Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. Consider a small macroeconomy where the natural rate of unemploymet is 5%. The current interest rate is 15 percent and the potential level of real GDP equal to $7.5 billion. Consumers spending behavior is described by theequation: C = 650+ 0.8DI while firm's investment behavior is described by the equation: 1 = 420 +0.25Y-600r. Trade is allowed and currently, exports is $380 million while imports is described by the equation: IM = 150+ 0.1Y.The government's spending is fixed at $740 million and net taxes is described by the equation: T = 140 + 0.25Y.(Question 3 of 5)Consider that actual rate of unemployment is 6% and the current government implements a monetary policy to stabilize the current economic environment.Given the government's policy, what will be the new equilibrium level of GDP (in millions of dollars)? (report your answer at 2 decimal places)

The equilibrium level of GDP is the juncture where aggregate demand, reflecting total spending,…

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the new equilibrium level of GDP (in m

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Consider a small macroeconomy where the natural rate of unemploymet is 5%. The current interest rate is 15 percent and the potential level of real GDP equal to $7.5 billion. Consumers spending behavior is described by the
equation: C = 650+ 0.8DI while firm's investment behavior is described by the equation: 1 = 420 +0.25Y-600r. Trade is allowed and currently, exports is $380 million while imports is described by the equation: IM = 150+ 0.1Y.
The government's spending is fixed at $740 million and net taxes is described by the equation: T = 140 + 0.25Y.
(Question 3 of 5)
Consider that actual rate of unemployment is 6% and the current government implements a monetary policy to stabilize the current economic environment.
Given the government's policy, what will be the new equilibrium level of GDP (in millions of dollars)? (report your answer at 2 decimal places)

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