Assume that equilibrium GDP (Y) is 5,000. Consumption (C) is given by the equation C = 500+ 0.6 (Y-T). Taxes (T) are equal to 600. Government spending is equal to 1,000. Investment is given by the equation I=2,160 - 100 r, where r is the real interest rate, in percent. In this case, the equilibrium real interest rate is: 5 percent. 8 percent. 10 percent. 13 percent.

Assume that equilibrium GDP (Y) is 5,000. Consumption (C) is given by the equation C = 500+ 0.6 (Y-T). Taxes (T) are equal to 600. Government spending is equal to 1,000. Investment is given by the equation I=2,160 - 100 r, where r is the real interest rate, in percent. In this case, the equilibrium real interest rate is: 5 percent. 8 percent. 10 percent. 13 percent.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter19: The Keynesian Model In Action

Section: Chapter Questions

Problem 8SQP

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