5. Suppose Austria has full-employment output of €310 billion in 2015, and government purchases are €70 billion. Desired consumption and desired investment are as follows (in billions of euros)

a. Why do desired consumption and desired investment fall as the real interest rate rises?

b. Find desired national saving for each value of the real interest rate.

c. If the goods market is in equilibrium, what are the values of the real interest rate, desired national saving, and desired investment? Show that both forms of the goods market equilibrium condition, Eqs. (4.7) and (4.8), are satisfied at the equilibrium.
Assume that output is fixed at its full-employment level.

d. Repeat part

(c) for the case in which government purchases fall to €50 billion. Assume that the amount people desire to consume at each real interest rate is unchanged.

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Real Interest Rate (%) Desired Consumption Desired Investment 23456 2 170 90 165 85 160 80 155 75 150 70