The following set of equations describe an economy: a. Find a numerical equation

Question

The following set of equations describe an economy:

a. Find a numerical equation relating planned aggregate expenditure to output and to the real interest rate.

O Assignment 10 (chapter1. x y Assignment 10 (Chapter 1 DPinterest xC Homework Help Ask A Qu x x -) Liezto.mheducation.com/hm.tpx Allison Willaims ECON2030 Principles of Macroeconomics: Section 1--MWF 10-10:50 ECONOMICS Assignment 10 (Chapter 12) instructions | help prev Question #2 (of 5) save & exit submit assignment Time remaining : 4:10:25 2 The following set of equations describe an economy: c , p G NX T = 15.000 + 0.5(Y--50.000r = 10.000-25, 000r =8.000 = 2.000 = 8.200 46.800 a. Find a numerical equation relating planned aggregate expenditure to output and to the real interest rate Instruction: Enter the value for mpc rounded to two decimal places PAE = b. At what value should the Fed set the real interest rate to elimin (Click to select) Click to select Click to select) Y. Hint Set output Yequal to the value of potential output given above in the equation you found in part a. Then solve for the real interest rate that also sets planned aggregate expenditure equal + Instruction: Enter your response as an integer value Real rate of interest .sp02h3Table.png sp02h3Pesto.jpg sp02h3Logo.png sp02h3Budget.xlsx sp02h2Brushetta.jpg Show all downloads 7:48 PM 3 11/16/2014

Explanation / Answer

given that

C=15000+.5(Y-T)-50000r

I=10000-25000r

G=8000

NX=2000 and T=8200

We know that Y=C+I+G+NX

This implies Y=15000+.5(Y-T)-50000r+10000-25000r+8000+2000

Y=15000+.5(Y-8200)-50000r+10000-25000r+8000+2000

Y=30900+0.5Y-75000r

Y=61800-150000r

Now given that Y*=46800 and should find r??

46800=61800-150000r

150000r=15000

r=0.1

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