1. Assume that the State of New York aproves a bill that eliminates sales taxes and at the same time the Congress in Washington D.C passes a tax bill which increases income taxes. Establish the macroeconomics effects of these policies on consumption, investment, interest rate and savings? Use the models (consumption model and loanable funds market) and the graphs. Explain thoroughly.

2. If the government wants to increase the amount of savings in the economy, how should it alter government spending? What effect will this action have on the interest rate in the economy? (Use the appropriate graph and model to illustrate the effect). Explain thoroughly.

3. Let's suppose we are living in a country in which opportunities of making profits, and entreprenurial activity are main determinants of investment demand. In this scenario, how is parameter b? How this affect the elasticity of investment with respect to changes in interest rate? How a cut in the benchmark interest rate could affect the quantity of investment in the economy? Explain thoroughly, use models, and graphs.

4. Explain how any technological advancement could affect investment, aggregate demand and income. Use graphs, models and explain