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3. Loanable Funds (LF) Model In a closed economy, suppose we know national output Y = C + I + G. The values of Y,
3. Loanable Funds (LF) Model In a closed economy, suppose we know national output Y = C + I + G. The values of Y, C, I and G are given as below. Y = 1,000. G = 250. T = 280. C = 120 + 0.75*(Y - T). I = 150 - 20*r. Here r is the equilibrium real interest rate (as %). Given values as above, finish the following questions. (1) How much is the Private saving, Public saving, and National saving in this economy? (2) How much is the equilibrium real interest rate (r as %). (3) If government spending (G) goes down to 230, then how much is the new equilibrium real interest rate (r)
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