An economy has government purchases of 1000.Desired national saving and desired investment are given by
= 200 + 5000r + 0.10Y - 0.20G
= 1000 - 4000r
When the full-employment level of output equals 5000,then the real interest rate that clears the goods market will be
A) 1) 11%.
B) 5) 56%.
C) 16.67%.
D) 21.11%.
Correct Answer:
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