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.
Chapter18: The Keynesian Model
Section: Chapter Questions
Problem 6SQP
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