An economy is described by the following set of equations:<\/p>
C<\/em>= 2,600 + 0.8(Y<\/em>-T<\/em>) - 5,000r,<\/em><\/p> I<\/em>= 3,000 - 15,000r,<\/em><\/p> G<\/em>= 800,<\/p> X<\/em>=M =<\/em>0,<\/p> T<\/em>= 1,000 +0.3Y.<\/em><\/p> The real interest rate, expressed as a decimal, is 0.10 (that is, 10 percent).<\/p> Suppose the flow of GDP consistent with full employment is 10,000. What real interest rate would achieve full employment?<\/p> <\/p> a)0.04<\/p> b)0.06<\/p> c)0.08<\/p> d)0.10<\/p>",
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