An economy has full-employment output of 5000. Government purchases are 1000. Desired consumption and desired investment are given by Cd=3000−2000r+0.10YId=1000−4000r where Y is output and r is the real interest rate. The real interest rate that clears the goods market is equal to
(a) 1.25%.
(b) 2.50%.
(c) 8.33%.
(d) 25.00%.