(6.3) This exercise reconsiders the parador of saving (paradox of thrift) in an economy with endogenous investment: Y = C(Y 7) + I(Y, i) +G C = c + x (Y - T) I = bo +b XY - by xi with co = 250, C1 = 0.5, bo = 200, b = 0.25, b2 = 1,500 and T = G = 300. (a) Assume that private households reduce their consumption due to a blurred eco- nomic outlook to save more; modeled as a decrease in co for simplicity. Does this situation cause the IS curve to shift or does this correspond to a movement along the IS curve? What does the shift/movement look like? Explain the economics behind the shift/movement. (b) Plot the situation described in (a) for Ac = -100 in (Y, i)-space. (c) Calculate the equilibrium private saving S = (Y - 7) - C both before and after the change in autonomous consumption. Does equilibrium private saving increase, decrease, or stay the same? (6.3) This exercise reconsiders the parador of saving (paradox of thrift) in an economy with endogenous investment: Y = C(Y 7) + I(Y, i) +G C = c + x (Y - T) I = bo +b XY - by xi with co = 250, C1 = 0.5, bo = 200, b = 0.25, b2 = 1,500 and T = G = 300. (a) Assume that private households reduce their consumption due to a blurred eco- nomic outlook to save more; modeled as a decrease in co for simplicity. Does this situation cause the IS curve to shift or does this correspond to a movement along the IS curve? What does the shift/movement look like? Explain the economics behind the shift/movement. (b) Plot the situation described in (a) for Ac = -100 in (Y, i)-space. (c) Calculate the equilibrium private saving S = (Y - 7) - C both before and after the change in autonomous consumption. Does equilibrium private saving increase, decrease, or stay the same