(Solution) An economy has full-employment output of YY = 1950. Desired consumption and desired investment are C d 600 0.5(Y T TR) 90r I d 400 200r . Government... > Snapessays.com


(Solution) An economy has full-employment output of YY = 1950. Desired consumption and desired investment are C d 600 0.5(Y T TR) 90r I d 400 200r . Government...


Find the general equilibrium values of the real interest rate, the price level, consumption, investment, national saving, private saving, and government saving.An economy has full-employment output of Y±

 

=

 

1950. Desired consumpTon and

 

desired investment are

 

r

 

TR

 

T

 

Y

 

C

 

d

 

90

 

)

 

(

 

5

 

.

 

600

 

?

 

?

 

?

 

?

 

?

 

r

 

I

 

d

 

200

 

400

 

?

 

?

 

.

 

Government purchases are

 

G =

 

170, taxes are ²

 

= 130, and transfers are

 

TR

 

= 10.

 

Money demand is

 

).

 

200

 

5

 

.

 

(

 

i

 

Y

 

P

 

M

 

d

 

?

 

?

 

²he nominal money supply is

 

M =

 

3500. ²he expected inFaTon rate is

 

05

 

.

 

?

 

e

 

?

 

.

 

³ind the general equilibrium values of the real interest rate, the price level,

 

consumpTon, investment, naTonal saving, private saving, and government saving.

 


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This question was answered on: Sep 21, 2023

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