Computing autonomous aggregate demand and short run output

Reference no: EM1376144

Details: C = 350 + 0.75(Y-T) - 200r
Ip = 200 - 500r
G = 250, T = 200, NX = 50
r = 5.75%

Answer the following questions using the above information. Show workings.
a) Calculate autonomous aggregate demand.
b) Calculate the short-run output.
c) Calculate the multiplier.
d) If Y* is 2500 what is the amount of the gap, and what type of output gap is it?
e) What would the interest rate have to be to eliminate the output gap?

Reference no: EM1376144

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