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Consider a close economy model of the short run. Assume that the government neither taxes nor spends. Private consumption and investments are given by C(t)
Consider a close economy model of the short run. Assume that the government neither taxes nor spends. Private consumption and investments are given by C(t) = acY I\") a;?b;l-'(r(t) F). You are told that output at time T is Y (T) = 70 and that the long run output is Y = 100. 1. Calculate private savings at T. 2. Calculate private investments at T. 3. Calculate the equilibrium interest rate at T
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