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Assume that GDP (Y) is 8,500B. Consumption (C) is given by the equation C = 210B + 0.9(Y -T). Investment (1) is given by the
Assume that GDP (Y) is 8,500B. Consumption (C) is given by the equation C = 210B + 0.9(Y -T). Investment (1) is given by the equation I = 1,2008 - 100r, where r is the real rate of interest. Taxes (T) are 400B and government spending (G) is 500B. Show your work/calculations! A. In this economy, compute private savings, public savings, and national savings Private savings = Public savings = National savings = B. Find the equilibrium real interest rate, r. Prove that r satisfies the income identity Y = C+1+ G
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