6. Suppose the Ecoland economy is represented by the following equations: Nee Ce er ee C = 500 + 05YD T = 600 I = 300 6D Seas) a ead G = 2,000

(a) Given the above variables, calculate the equilibrium level of output.

(b) Now, assume that consumer confidence decreases, causing a reduction in the autonomous component of consumption from 500 to 400. What is the new equilibrium level of output? How much does income change as a result of this event? What is the multiplier for this economy?