Suppose that we have an AEF given by the following: = 6(200 ) + 0.7 Where the Marginal Propensity to Consume (MPC) = 80%, the tax rate (t) = 10% and the Marginal Propensity to Import (MPI) = 2%. Government Spending (G) is currently $200. Suppose that Short-Run Aggregate Supply (SRAS) in this economy is also given by: = 5 Suppose also that potential GDP (Y*) in this economy is equal to $900.

1. What must be the short-run equilibrium Real GDP (Y) and price level (p)? [2 points]