1.Y = C + I + G + X_n

C = 100 + .8(Y - T)

I= 250 - 15 i

X_n = 115 - .15Y + .15 Y_F - 8i

G = 265

T = 300

Y_F = 1000

i= 5%

Y = 1500

Y* = 1400

a.What are the multipliers for government spending, taxes, and the interest rate?

b.If taxes and the interest rate don't change, how much would government spending have to change to reduce inflationary pressures by reducing Y to Y*?

c.If monetary policy increases the interest rate to 6%, how much would G have to change?

d.If the interest rate rises to 6% and taxes are increased by 10, how much would G have to change?