1. (5 points) Suppose the government raises both taxes and spending by $250 billion. 3. Assuming the marginal propensity to consume is 0.8, what happens to the following? {Do they rise or fall? By what amount?} i. Public Savings ii. Private Savings iii. National Savings iv. Investment b. How do your answers to the above change if the marginal propensity to consume is 0.95