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Suppose the economy of country A can be described by the following set of equations: C = 100+ .75 (YT), T = 100+.2Y, I =
Suppose the economy of country A can be described by the following set of equations: C = 100+ .75 (YT), T = 100+.2Y, I = 375 L = 100+.2Y50i M = 100 G = 600, where C is consummion; T represents taxes; I is investment; i is the interest rate (expressed as a whole number); L denotes money demand; M is the money supply; G is government expenditure and Y is national income. 1. What is the equilibrium level of output and the market clearing interest rate
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