Question: Consider the goods market model where consumption is given by: C = Co + 61 (Y T), investment is given by: I = be +

Consider the goods market model where consumption is given by: C = Co + 61 (Y T), investment is given by: I = be + blY - bzi, and tax is given by T = to + tlY. G is government spending and is given. Assuming co = 100, c1 = 0.6, b0 = 150, bl = 0.2, t1 = 0.3, and b2 = 1,000. Keeping all other things constant, what will be the change in the equilibrium output (Y *) in the goods market if the interest rate, 5', is reduced by 5% (round to the nearest decimal point)

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