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Consider the following Open Economy: (billions of dollars) Personal Disposable Income (YD) = Income (Y) T +TR. Consumption (C) = 700 + .75(YD). Transfers (TR)

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Consider the following Open Economy: (billions of dollars) Personal Disposable Income (YD) = Income (Y) T +TR. Consumption (C) = 700 + .75(YD). Transfers (TR) = 200. Taxes = 500. Government Spending (G) = 400 Investment (I) = 550 1000*interest rate (r). Interest rate (r) = .025 (2.5%) Exports (X) = 600. Imports (IM) = 500. In this economy, Equilibrium Income is , the Government Budget is and the Balance of Trade is Select one: a. 6000 billion, Deficit of 100 billion, Surplus of 100 billion. b. 6000 billion, Surplus of 100 billion, Deficit of 100 billion. c. 6200 billion, Deficit of 100 billion, Deficit of 100 billion d. 6200 billion, Surplus of 100 billion, Surplus of 100 billion e. 6200 Billion, Deficit of 100, Surplus of 100

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