4.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. Howmuch would output contract by if planned investment fell by 10?
5.Suppose an economy is initially in equilibrium at $800 billion and investment increases by $10 billion. This causes the economy to expand to $1200 billion. Calculate the value of the multiplier.
6.Please explain the "paradox of thrift”
7.Assume the following behavioral equations for a macroeconomy:C = 100 + .9Yd, I = 50, T = 100 and G = 40 (a) Calculate the equilibrium level of output.(b) Given the information, calculate the level of consumption that occurs at the equilibrium level of income.(c) Suppose government spending increases by 100. Calculate the new equilibrium level of income.