ECON 2202 Lecture Notes - Lecture 11: Real Interest Rate, Real Wages, Barter
3 Feb 2016
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The equation y = c(y t ) + i(r) + g may be solved for the equilibrium level of: government purchases. the interest rate. Christopher gunn: in the classical model with fixed income, if the interest rate is too high, then investment is too. Consumption is given by the equation c = 500 + Investment (i) is given by the equation i = 2,000 100r, where r is the real interest rate in percent. This shift, in a neoclassical economy, will: lower investment and raise the interest rate. raise investment and lower the interest rate. lower both investment and the interest rate. raise both investment and the interest rate. 5 variables, is generally thought to be a property of the economy in the long run: nominal, neither real nor nominal real and nominal. Christopher gunn: problems (70 marks, (35 marks) consider an economy described by the following equations: C = 300 + 0. 7(y t )
