Subject: calculate autonomous aggregate demand / short-run output / multiplier
Details: C = 350 + 0.75(Y-T) - 200r
Ip = 200 - 500r
G = 250, T = 200, NX = 50
r = 5.75%
Answer the following questions using the above information. Show workings.
1) Caluclate autonmous aggregate demand.
2) Calculate the short-run output.
3) Calculate the multiplier.
4) If Y* is 2500 what is the amount of the gap, and what type of output gap is it?
5) What would the interest rate have to be to eliminate the output gap?