An economy is described by the following? equations:
Desired consumption
Cd = 150? +0.5(Y-T?)-500r
Desired investment
Id =100-500r
Real money demand L =0.5Y-1,000r
Money supply M = 1,500
Full-employment output Y= 500
Government purchases G= 250
Taxes T = 250
Assume that expected inflation is zero so that money demand depends directly on the real interest rate.
Calculate the long-run general-equilibrium values of:
Output
(Y):___
The real interest rate
(r):___
round to three decimalplaces)
