In a Certain Economy, the Components of Aggregate Spending Are

question 75

Multiple Choice

In a certain economy, the components of aggregate spending are given by: C = 100 + 0.9(Y - T) - 500r
I = 150 - 1,000r
G = 200
NX = 50
T = 100
Given the information about the economy above, what is the short-run equilibrium output if the real interest rate is 4 percent?

• A) 3,800
• B) 3,500
• C) 350
• D) 410

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