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Consider a closed economy where the full-employment level of output is 989. Its desired consumption and desired investment is C^d = 200 - 2000r +
Consider a closed economy where the full-employment level of output is 989. Its desired consumption and desired investment is C^d = 200 - 2000r + 0.7(Y-T) and I^d = 500 - 3000r, respectively. Taxes T are 20% of output. The government's G is 183.What is the level of real interest rate (r) in the general equilibrium?[Very Important: Please write down your answer as fractions, so that 10.3% should be 0.103, and 4.3% should be 0.043. Otherwise you may lose marks unnecessarily].
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