Find a equaltion relating planned aggregate expenditure

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Reference no: EM13214976

Here's another set of equations describing an economy:
C = 14,400 + 0.5(Y - T) - 40,000r
Ip = 8,000 - 20,000r
G = 7,800
NX = 1,800
T = 8,000
Y* = 40,000

Questions:
a. Find a numerical equaltion relating planned aggregate expenditure to output and to the real interest rate.
b. At what value should the Fed set the real interest rate to eliminate any output gap?

Reference no: EM13214976

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