3) Assume that the economy is described by the following equations:

= 480 + 0.5

= 110

= 250 = 70

a) Find:

i) the balance product ii) disposable income iii) consumption.

b) Calculate the total demand.Is it equal to production?Explain.

c) Now suppose that = 300. Find the product of equilibrium.Calculate the total demand.Is it equal to production?Explain.

d) Assume that = 300, so that the product of equilibrium is given by your answer to c).Calculate private and public savings.Is their sum equal to the investment?Explain.