Discussion:
1. Suppose that the following equations describe an economy. ( C, I, G, T and Y are measured in billions of dollars, and r is measured as a percent; for example, r = 10 = 10%):C = 170 + 0.6 ( Y - T)
T = 200
I = 100 - 4r
G = 350
(M/P)d = L = 0.75Y - 6r
Ms/P = 735
a. What is the equilibrium levels of real output
b.What is the equilibrium real interest rate