申論題

3. Consider an economy described by the following equation:
Y = C + I + G
C = 100 + 0.75 (Y – T)
I = 500 – 50 r
G = 125
T = 100
Where Y is GDP, C is consumption, I is investment, G is government purchase, T is taxes, and r is the
interest rate. If the economy were at full employment, GDP would be 2,000.

(1) Suppose the central bank’s policy is to adjust the money supple to maintain the interest rate at 4%, so r=4. Solve for GDP.