Desired consumption is Cd = 2000 + 0.9Y - 100,000r - G,and desired investment is Id = 1000 - 45,000r.Real money demand is Md/P = Y - 6000i.Other variables are πe = 0.03,G = 500, 
= 1000,and M = 2100.
(a)Find the equilibrium values of the real interest rate,consumption,investment,and the price level.
(b)Suppose government purchases decline to 400.What happens to the variables listed in part (a)?
(c)Suppose government purchases rise to 600.What happens to the variables listed in part (a)?
(d)What feature in this example leads to the result that you don't need to know the amount of taxes collected by the government to find the equilibrium?
Definitions:
Baseline Dimensioning
A method of dimensioning in which all dimensions are given from a specified baseline or datum, providing a clear and systematic way of defining dimensions.
Coordinate Dimensioning
A detailing method that specifies the locations of features based on X, Y coordinates, often used in conjunction with a drawing's grid.
Relative Coordinate Programming
A method in computer numerical control (CNC) programming where each point or move is based on its position relative to the preceding point, not from the origin.
Dimensions
Refers to the measurable attributes of an object, including its length, width, height, and volume.
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