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Assume the following open economy C = 300 + 0.80(Y - 125) I = 150 G = 250 X =115 M = 125+.05Y a. Determine (solve for) the equilibrium level of...

Assume the following open economy

C = 300 + 0.80(Y - 125)

I = 150

G = 250

X =115

M = 125+.05Y

a. Determine (solve for) the equilibrium level of income or GDP (Y).

b. Determine the impact on income of a 50 increase in government spending from 250 to 300.

c. Using the original data, compute the impact of a 50 decrease in taxes from 125 to 75.

d. If the government seeks to raise income to 3,000, how much should it raise government spending?
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1. (15 points) Assume the following open economy for Questions 1a, 1b, 1c and 1d below:
C = 300 + 0.80(Y – 125)
I = 150
G = 250
X =115
M = 125+.05Y
1a). Determine (solve for) the equilibrium...

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