In a Certain Economy,the Components of Planned Aggregate Expenditure Are

question 2

Multiple Choice

In a certain economy,the components of planned aggregate expenditure are given by:
C = 60 + 0.6(Y - T) - 1,000r
I = 200 - 1,000r
G = 200
NX = 50
If net taxes equal 100 and the central bank sets the interest rate equal to 0.05 (5%) ,short-run equilibrium output equals

• A) 825.
• B) 875.
• C) 925.
• D) 975.
• E) 1,025.

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