# Question: the income identity for a closed economy says that y...

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The income identity for a closed economy says that

Y = C+I+G

Assume that in the Economy of Berkeley GDP (Y) is equal to 6,000 and consumption (C) is given by the equation:

C = 600 + 0.6(Y-T)

In addition, investment (I) is given by the equation

I = 2,000 - 100r

where r is the real of interest rate in percent. Taxes (T) are 500 and government spending (G) is also 500. What are the equilibrium values of C, I, and r?