Question: Consider the goods market model where consumption is given by: C = c0+c1(Y-T), investment is given by I = b0+b1Y-b2i and G and T are

Consider the goods market model where consumption is given by: C = c0+c1(Y-T), investment is given by I = b0+b1Y-b2i and G and T are given. Assuming c0=100, c1=0.5, b0=150, b1=0.3 and b2=1000. Keeping all other things constant, what will be the change in the equilibrium output (Y*) in the goods market if the interest rate, i, is reduced by 1% or 0.01?

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