An economy has full-employment output of 5000. Government purchases are 1000. Desired consumption and desired investment are given by

C^(d)=3000-2000r+0.10YI^(d)=1000-4000r

where

Y

is output and

r

is the real interest rate. The real interest rate that clears the goods market is equal to\ (a)

1.25%

.\ (b)

2.50%

.\ (c)

8.33%

.\ (d)

25.00%

.

30. An economy has full-employment output of 5000. Government purchases are 1000. Desired consumption and desired investment are given by Cd=30002000r+0.10YId=10004000r where Y is output and r is the real interest rate. The real interest rate that clears the goods market is equal to (a) 1.25%. (b) 2.50%. (c) 8.33%. (d) 25.00%