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A closed-economy has full-employment output of 1000. Government purchases are 210. Desired consumption and desired investment are given by C = 45 -50r + 0.7Y

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A closed-economy has full-employment output of 1000. Government purchases are 210. Desired consumption and desired investment are given by C = 45 -50r + 0.7Y and | = 75 100r, where Y is output and r is the real interest rate. Assume that output equals full-employment output. The real interest rate that clears the goods market is equal to (A) 10% (B) 15% (C) 20% (D) 25%

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