In a Hypothetical economy,
C = 124 +.75 (DISPOSIBLE INCOME)
I = 60 - 9 r
G = 156
NETXPORTS = 38-.05Y
The government levies a 20% proportional tax, therefore
Taxes = .20Y
Also
Md = .05Y+22+ 120
R
Ms = 100+ 11 r
A) Determine the equilibrium value of income Y, and the interest rate , R.
B) Check that leakages equal injections.