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Solve These Equations for the Equilibrium Values of C, I ε\varepsilon

Question 26

Essay

Solve these equations for the equilibrium values of C, I, NX, CF, r, and ε\varepsilon . (Hint: Substitute equations (9) and (1) into (3), then substitute (1), (3), (4), (8), and (5) into (2). Then substitute (5) and (6) into (7). Now you have two equations in r and ε\varepsilon . Check your work by seeing that all of these equations balance given your answers.)

Correct Answer:

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c = 2,000; I = 1,750...

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