Consider the diagram below, which applies to a nation with no government spending, taxes, and net exports. Use the information in the diagram to answer the following questions, and explain your answers.

a. What is the marginal propensity to save?
b. What is the present level of planned investment spending for the present period?
c. What is the equilibrium level of real GDP for the present period?
d. What is the equilibrium level of saving for the present period?
e. If planned investment spending for the present period increases by $25 billion, what will be the resulting change in equilibrium real GDP? What will be the new equilibrium level of real GDP if other things, including the price level, remain unchanged?

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