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Assume that the following equations characterize a large open economy: (1) Y = 5,000 (2) Y = C +1+G+NX (3) C = 1/2(Y - T)
Assume that the following equations characterize a large open economy: (1) Y = 5,000 (2) Y = C +1+G+NX (3) C = 1/2(Y - T) (4) 1 =2,000 - 100r (5) NX = 500 - 500E (6) CF = -100r (7) CF = NX (8) G = 1,500 (9) T = 1,000. In this economy, what is the value of the real interest rate, r? 1.5 O 2.5 3.5 None of the above
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