For a hypothetical (closed) economy, desired Consumption and Investment are given by: cd=1000-1500r +0.5(Y-T) Id=180-1000r Assume...

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For a hypothetical (closed) economy, desired Consumption and Investment are given by: cd=1000-1500r +0.5(Y-T) Id=180-1000r Assume that Government spending (G) and taxes (T) are 200. a) For a GDP (Y) of 2500, find the equilibrium real interest rate and level of investment. b) If GDP decreases to 2400, find the new equilibrium levels of Investment and the real interestrate. c) How is total saving and investment affected if the mpc increases to 0.55? d) Using a Graph, explain how the scenario described in c) on equilibrium in the market for goods. e) How do your answers to (a-d) change for a small open economy with a world interest rate of 10% (enter as 0.1) For a hypothetical (closed) economy, desired Consumption and Investment are given by: cd=1000-1500r +0.5(Y-T) Id=180-1000r Assume that Government spending (G) and taxes (T) are 200. a) For a GDP (Y) of 2500, find the equilibrium real interest rate and level of investment. b) If GDP decreases to 2400, find the new equilibrium levels of Investment and the real interestrate. c) How is total saving and investment affected if the mpc increases to 0.55? d) Using a Graph, explain how the scenario described in c) on equilibrium in the market for goods. e) How do your answers to (a-d) change for a small open economy with a world interest rate of 10% (enter as 0.1)

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a Given Y 2500 G 200 T 200 C 1000 1500r 05Y T 1000 1500r 052500 200 1000 1500r 1200 2200 1500r Id 18... View the full answer