Table 36-1 Suppose the economy of Macroland is described by the following: C = 200 + 0.8 DI (DI = disposable income)
I = 300 + 0.2 Y − 50 r ( Y = GDP)
( r , the interest rate, is measured in percentage points. For example, a 9 percent interest rate is r = 9). For this economy, assume that the Federal Reserve uses its monetary policy to peg the interest rate at
R = 5
G = 750
T = 0.25 Y
X = 200
M = 150 + 0.2 Y
Hint: DI = Y − T
From Table 36-1, find the trade deficit or surplus.

Question

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The Answer of Table 36-1 Suppose the economy of Macroland is described by the following: C = 200 + 0.8 DI (DI = disposable income)
I = 300 + 0.2 Y − 50 r ( Y = GDP)
( r , the interest rate, is measured in percentage points. For example, a 9 percent interest rate is r = 9). For this economy, assume that the Federal Reserve uses its monetary policy to peg the interest rate at
R = 5
G = 750
T = 0.25 Y
X = 200
M = 150 + 0.2 Y
Hint: DI = Y − T
From Table 36-1, find the trade deficit or surplus.

Table 36-1 Suppose the Economy of Macroland Is Described by the Following