Consider an economy described by the following: If the real interest rate is r =
ID: 2495913 • Letter: C
Question
Consider an economy described by the following: If the real interest rate is r = 2, equilibrium output y^c = s trillion. (Round your response to one decimal place.) If the real interest rate is r = 5, equilibrium output Y^c = s trillion. (Round your response to one decimal place.) If government purchases increase to $4.2 trillion and the real interest rate r = 2, equilibrium output Y = trillion. (Round your response to one decimal place.) If government purchases increase to $4.2 trillion and the real interest rate r = 5, equilibrium output Y = trillion. (Round your response to one decimal place.)Explanation / Answer
a) Y = 3.3 + 1.4 + (3.5 - 3) + 0.7Y - 1
b)when r = 2, equn output is 30.99
when r - 5 equilm output is -o.1 7