Question: If production function is: Y = 2K+5L where Y is production, K is capital and L is labor Assume that K=100 and L=100. If C=10+0.75

If production function is: Y = 2K+5L where Y is production, K is capital and L is labor Assume that K=100 and L=100. If C=10+0.75 Y, where C is consumption I 200-1000 r where I is investment and r is interest rate G= 50 where G is government spending How much is the interest rate at equilibrium. 1000 b. 8.5% d. 5%

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