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  3. an economy has full-employment output of 1000. des

An economy has full-employment output of 1000. Desired consumption and desired investment are cd =...

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Accounting

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An economy has full-employment output of 1000. Desired consumption and desired investment are cd = 200 + 0.8(Y - T') 500r; Id = 200 500r. Government purchases are 196 and taxes are T = 20 + 0.25Y. Money demand is d 0.5Y - 250(r + m), P where the expected rate of inflation me 0.10. The nominal supply of money M=9890. a. What are the general equilibrium values of the real interest rate, price level, consumption, and investment? b. Suppose that government purchases are increased to G= 216. What are the new general equilibrium values of the real interest rate, the price level, con- sumption, and investment

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