An economy is described by the following equation Cd=14400+0.5(Y-T)-40000r, Ip=8000-20000r, G=7800, NX=1800, T=8000 a) Find the numerical

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An economy is described by the following equation

Cd=14400+0.5(Y-T)-40000r, Ip=8000-20000r,

G=7800, NX=1800, T=8000

a) Find the numerical equation relating planned aggregate expenditure (PAE) to output (Y) and to real interest rate (r).

b) The real interest rate is 0.133, find short-run equilibrium output.

c) Potential output, y*, equals 40,000. What real interest rate should be Reserve Bank set to bring the economy to full employment?

Related Book For answer-question

Principles of Economics

ISBN: 978-0073511405

5th edition

Authors: Robert Frank, Ben Bernanke

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Posted Date: Mar 07, 2024 12:41 AM

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An economy is described by the following equation Cd=14400+0.5(Y-T)-40000r, Ip=8000-20000r, G=7800, NX=1800, T=8000 a) Find the numerical

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Solution a Numerical equation for PAE Planned Aggregate Expenditure PAE is the sum of Consumption Cd ... View the full answer

Principles of Economics

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