6.) Consider a relatively well-developed liberal democracy, with a closed-economy, described by the following equations in the short-run:

The Goods-and Services Market:

-Aggregate Consumption Spending: C (Yd) = 150 + .75Yd

-where: *Yd = disposable income = *(Y- T)

-Aggregate Investment Spending: I(r) = 100 - 20r

-Annual Federal Income Tax Revenue: T = 200 (in billions)

-Government Spending: G = 350 (in billions)

-Equilibrium in a closed Goods-and-Services Market:

S (*Savings) = I (*Investment)

Y = C (Yd) + I (r) + G