QUESTION 4 Neverland is a closed economy that severed all links to the outside world. Its economy can be described by the following consumption and investment curves: Cª(r)=5000 – 1000r+0.25Y and Iª (r) = 500 – 1800r+0.2Y· Its output is y = 13000 and government spending is G=1800: What is the equilibrium interest rate (in percent)? Note: Type in your answer approximated to two decimal points, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered incorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard will automatically delete it and you should not do anything about it.

QUESTION 4 Neverland is a closed economy that severed all links to the outside world. Its economy can be described by the following consumption and investment curves: Cª(r)=5000 – 1000r+0.25Y and Iª (r) = 500 – 1800r+0.2Y· Its output is y = 13000 and government spending is G=1800: What is the equilibrium interest rate (in percent)? Note: Type in your answer approximated to two decimal points, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered incorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard will automatically delete it and you should not do anything about it.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter18: The Keynesian Model

Section: Chapter Questions

Problem 6SQP

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