Problem
Suppose an economy is described by the IS-LM model with the following parameter values. Autonomous consumption is 400, marginal propensity to consume is 0.5,autonomous investment is 200,the sensitivity of investment to output and interest rate are 0.3 and 60, respectively. Taxes are 140,and government spending is 120. The interest rate equals 0.06.
What is the equilibrium level of consumption in this economy?