3. I will change if (a) companies purchase more government bonds (b) there is an increase in successful takeover bids individuals purchase more government bonds (d) companies purchase more machines 4. What the value of the multiplier if desired consumption is independent of income? 5 . Assume investment depends on income, say, I = go + gaY What is the multiplier in this case? 6. Assume the government always follows a countercyclical policy. When real income falls it increases government expenditures, when it rises it reduces expenditures, say, G = G. - hY. What is the value of the multiplier? 7. If people desire to save more, real income will (a) rise because, since saving is equal to investment, a rise in saving will lead to a rise in investment and thus a rise in real income. (b ) fall because of the fall in consumption 8. Assume the interest rate is fixed. An increase in G will lead to (a) an increase in consumption (b ) an increase in investment (c) an increase in real income (d) an increase in saving