Question

Consider an economy described by the following: c = $3.25 trillion 7 = $1.4 trillion G = $3.5 trillion T = $3 trillion NX = $-0.5 trillion 7= 1 mpc = 0.7 d = 0.4 x = 0.15 U D . = 3.25 +(1-0.7 )Y. The simplified expression for the investment function is: O A. 1 = 3.25 -0.4r. OB. 1 = 1 -0.7r. OC. 1 = 3.25 -0.7r. D. 1 = 1 -0.4. The simplified expression for the net export function is: OA. NX = -0.15-0.5r. OB. NX = -0.7 -0.15r. C. NX = -0.5-0.15r. OD. NX = -1-0.7r. An expression for the IS curve is: A. Y = 1.83 - 17.17r. OB. Y = 17.17-17. OC. Y = 17.17 -3.257. D. Y = 17.17 - 1.83r. If the real interest rate is r=2, equilibrium output Y = S trillion. (Round your response to one decimal place.)

Answer 1

from the given data Investment function , I 2 I _d (or j) 2104-014(0+1) 21.4.0.48 -0.4 211-0.48] The correct option is D. Net export function, NA 2 NA -xr 21-05-0.150 The correct option is C.

Consumption function, Cačampe (Y-T) тzт, is a used : (2 3.25 + 0.7(7-3) Ź 1.15 +0.77 IS Cuore, 72 C + I + G + NX Y 2 1.15 + 0.77 +1 0.48 + 3.5 – 0.5 – 0.155. 0.34 25.15-0.550 2) Y2/17.17 - 1.838. The correct option is D.

It real interest rate & 22% equilibrium output ye a 17.17 - 1.8362) 2 $13.15 Trillion Therefore ye $1312) Trillion (Rounded).