CENGAGE |MINDTAP Q Search this co opic 6 Assignment Attempts Score / 6 5. Problems and Applications Q11 Consider an economy described by the following equations: Y = C+I+G C = 150 + 0.6 x (Y -T) I = 500 - 50 x r G = 200 T = 150 where Y is GDP, C is consumption, I is investment, G is government purchases, T is taxes, and r is the interest rate. If the economy were at full employment (that is, at the natural rate of output), GDP would be $1,400. Identify the equation(s) each of the following statements describes. Check all that apply. Statement C I G T It is an autonomous amount, independent of other factors. It is a function of disposable income. 0 0 0 It depends on the interest rate. The marginal propensity to consume in this economy is 0.6n/static deploy CENGAGE | MINDTAP Q Search this course Topic 6 Assignment where Y is GDP, C is consumption, I is investment, G is government purchases, T is taxes, and r is the interest rate. If the economy were at full employment (that is, at the natural rate of output), GDP would be $1,400. Identify the equation(s) each of the following statements describes. Check all that apply. Statement C I G T It is an autonomous amount, independent of other factors. It is a function of disposable income. It depends on the interest rate. 0 0 0 The marginal propensity to consume in this economy is 0.6 . Suppose the central bank's policy is to adjust the money supply to maintain the interest rate at 2%, so r = 2. When the interest rate is 2%, GDP is $ GDP at an interest rate of 2% is the full-employment level. Assuming no change in monetary policy, in government purchases by | $ would restore GDP to the full-employment level. (Note: Assume that this change in fiscal policy has no crowding-out effect.) Assuming no change in fiscal policy, in the interest rate by % would restore GDP to the full-employment level. Save & Continue Continue without saving