(b) Given the information, calculate the level of consumption and saving that occurs
at the equilibrium level of income.
(c) Suppose planned investment increases by 100. Calculate the new equilibrium level
of income. Given your answer, what is the size of the multiplier for this economy?
(d) Will the level of saving and consumption change as the economy adjusts to this
change in planned investment? Explain.
Assume that the saving function is S = - 100 + .1Y and planned investment is 40.
Calculate the equilibrium level of output using the leakages/injections approach. How
much would output contract by if planned investment fell by 10?
Assume the following saving function and investment function: S = -200 + .25Y and I
= 25. Calculate the equilibrium output level.