3. You are given the following income-expenditure model for the economy of Jitra

C=200 +0.8% Yd 50 G=100 I = 140

Where C, T, G, I and Yd represents consumption, tax, government spending, investment and disposable income, respectively.

i. Derive the aggregate expenditure function and the saving function

ii. Calculate the equilibrium level of income and consumption in Jitra

iii. Based on your answer in b(iii), compute the new level of equilibrium income if the government spending increases to 150. iv. Is this economy experiences a budget deficit, budget surplus or balanced budget? Explain your answer.