Continue with the same equations. a. What is the value ofα G​ which corresponds to the simple multiplier (with taxes) of Chapter 9? b. By how much does an increase in government spending ofΔ Gˉ increase the level of income in this model, which includes the money market? c. By how much does a change in government spending ofΔ Gˉ affect the equilibrium interest rate? d. Explain the difference between your answers to parts (a) and (b).

1. The following equations describe an economy. (Think ofC,I,G, etc., as being measured in billions andias a percentage; a 5 percent interest rate impliesi=5.) \[ \begin{aligned} C & =0.8(1-t) Y \\ t & =0.25 \\ I & =900-50 i \\ \bar{G} & =800 \\ L & =0.25 Y-62.5 i \\ \bar{M} / \bar{P} & =500 \end{aligned} \] a. What is the equation that describes theIScurve? b. What is the general definition of theIScurve? c. What is the equation that describes theLMcurve? d. What is the general definition of theLMcurve? e. What are the equilibrium levels of income and the interest rate?

1.      In a classical model of a closed economy, assume the equilibrium GDP (Y) is $7000, Consumption C is given by the equation.C = 270 + 0.8 (Y-T).Taxes (T) is equal to $800 and government spending G is $500.What is the equilibrium investment?

Answer the questions below for the economy of Motak using the graph below.  a. If GDP is $800 and government spending is G1, the size of Motak's budget deficit is $ billion. b. If government spending is decreased by the size of the deficit in part (a), draw the new curve labelled G2 in the graphing area above. c. Suppose the multiplier has a value of 2, the new level of equilibrium GDP is $ billion. d. Motak's deficit at this new level of equilibrium GDP is $ billion.

Suppose the private sector only hold currency (i.e. there are no banks). The demand for money is given by Money demand = $Y(0.4 - i)The nominal income is $100 and the supply of money is held fixed at 25. Starting from the initial equilibrium suppose nominal income increases to $125. The increase in income will ________ the demand for money and the new equilibrium interest rate will be ________ .Group of answer choicesincrease; 0.15increase; 0.2decrease; 0.1decrease; 0.05

In the Keynesian cross, assume the following equation gives the consumption function.𝐶 ൌ 200 ൅ 0.75ሺ𝑌 െ 𝑇ሻPlanned investment is 100, and government purchases and taxes are both 100.(a) Graph planned expenditure as a function of income.(b) What is the equilibrium level of income?(c) If government purchases increase to 125, what is the new equilibrium income?(d) What level of government purchases is needed to achieve an income of 1,600?