Question

We want Y to rise from 5,515 back to 5,565. We know that C = 100 + 0.8(Y-T), G = 490, T = 490, NX = 20, so set Y = C + I + G + NX = 5,565 and solve for I, I = 895. This is sensible since we want I to rise and offset the drop in C confidence. Now solve for i that would give I = 895, and i = 0.0228, or 2.28%. This is also sensible because the BOC would need to drop i from 2.5% to 2.28%...... how do i get to 2.28% when interest used to be 2.5%? someone please help We want Y to rise from 5,515 back to 5,565. We know that C = 100 + 0.8(Y-T), G = 490, T = 490, NX = 20, so set Y = C + I + G + NX = 5,565 and solve for I, I = 895. This is sensible since we want I to rise and offset the drop in C confidence. Now solve for i that would give I = 895, and i = 0.0228, or 2.28%. This is also sensible because the BOC would need to drop i from 2.5% to 2.28%...... how do i get to 2.28% when interest used to be 2.5%? someone please help @Economics - Finan…