3. Assume the following prevails in Pleasantville:

Y = C + I + G

C = 500 +0.8(Y - T)

I = 300

G = 700

T = 0.25Y

a. The marginal propensity to consume

b. Calculate the equilibrium level of national income using the income -expenditure approach and the leakage injection approach

c. Determine the size of the multiplier

d. Draw a well labelled income-expenditure diagram to show this equilibrium (