Here is another set of equations describing an economy: (L02) C = 14,400 + 0.5 (Y -

Question:

Here is another set of equations describing an economy: (L02)
C = 14,400 + 0.5 (Y - T) - 40,000r f = 8,000 - 20,000r G = 7,800 NX = 1,800 T = 8,000 Y* = 40,000
a. Find a numerical equation relating planned aggregate expenditure to output and to the real interest rate.
b. At what value should the Fed set the real interest rate to eliminate any output gap?