If Md = 1,000 – 400r and Ms = 2,000, the MPC = .85, G=100, and T = 1
If Md = 1,000 – 400r and Ms = 2,000, the MPC = .85, G=100, and T = 120, then the equilibrium interest rate is
a. 2.5
b. 5
c. 10
d. 20
e. not enough information was given.
ANSWER
A
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