What is the equilibrium real interest rate

Reference no: EM13726961

1. Suppose that the following equations describe an economy. ( C, I, G, T and Y are measured in billions of dollars, and r is measured as a percent; for example, r = 10 = 10%):C = 170 + 0.6 ( Y - T)

T = 200

I = 100 - 4r

G = 350

(M/P)d = L = 0.75Y - 6r

Ms/P = 735

a. What is the equilibrium levels of real output

b. What is the equilibrium real interest rate

Reference no: EM13726961

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