Table 36-1 Suppose the Economy of Macroland Is Described by the Following

question 23

Multiple Choice

Table 36-1 Suppose the economy of Macroland is described by the following: C = 200 + 0.8 DI (DI = disposable income)
I = 300 + 0.2 Y − 50 r ( Y = GDP)
( r , the interest rate, is measured in percentage points. For example, a 9 percent interest rate is r = 9) . For this economy, assume that the Federal Reserve uses its monetary policy to peg the interest rate at
R = 5
G = 750
T = 0.25 Y
X = 200
M = 150 + 0.2 Y
Hint: DI = Y − T
From Table 36-1, compute equilibrium GDP for Macroland.

• A) 3,000
• B) 2,950
• C) 2,625
• D) 2,525

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Definitions:

Retirees

Individuals who have withdrawn from active working life, often due to age, and are typically supported by pensions, savings, or benefits.

Physical Aspects

The tangible, measurable characteristics or properties of objects or systems.

Retirement

The period of one's life after permanently leaving one's occupation or workplace, often due to age.

Level of Satisfaction

A measure of how content an individual is with various aspects of their life, including job, relationships, and personal achievements.