An Economy Has Full-Employment Output of 5000

question 85

Multiple Choice

An economy has full-employment output of 5000.Government purchases are 1000.Desired consumption and desired investment are given by
Cᵈ = 3000 - 2000r + .10Y
Iᵈ = 1000 - 4000r
Where Y is output and r is the real interest rate.The real interest rate that clears the goods market is equal to

• A)1.25%.
• B)2.50%.
• C)8.33%.
• D)25.00%.

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Definitions:

Broad Base

Typically refers to a wide foundation or support, often implying something with a wide range of sources or support.

Replacement Reproduction

This refers to a reproduction strategy where the offspring number is equal to the parent number, aiming to sustain the population size.

Zero Population Growth

A demographic balance where the number of people in a specified population neither grows nor declines, due to a balance between birth rates and death rates.

Praying Mantis

A carnivorous insect known for its distinctive posture that resembles praying hands, belongs to the family Mantidae.