(a) Suppose, that in the closed economy autonomous consumption C = $100, autonomous investment I = $105, government spending G = $210, lump-sum taxes T x= $20, transfer payments Tr = $70, marginal propensity to consume m = 0.8, marginal propensity to invest M2}; = 0.05, and the tax rate I = 25%. What is the equilibrium condition in the goods market for this economy? Calculate: (i) the value of autonomous spending; (ii) the value of the autonomous spending multiplier (@2 give the result in the form of a common fractionl; (iii)the equilibrium level of output. What is the relation between these three values? Prove with calculations. Diraw the graphs in the (AE Y), and (I SAGG Y) spaces. (b) Suppose the economy is now engaged in international transactions and begins to sell part of its production worth $70 to foreigners. Calculate the new values of: (i) the value of autonomous mg; (ii) the value of the autonomous spending multiplier (IE: give the result in the form of a common actionl; (iii)the equilibrium level of output. Briey explain the changes. Show the changes on your graphs from point (a) (0) Suppose now domestic agents start to buy foreign goods worth $21 independently of their income. Calculate the new values of: (i) autonomous M (ii) the autonomous spending mm (iii)the equilibrium level of output. Briey explain the changes. Show the changes on your graphs from point (b) ((1) Now suppose that in addition to autonomous imports, domestic agents begin to spend 5% of national income for purchases of foreign goods. What is the equation for net exports? What is the new equilibrium condition in the goods market for this economy? Calculate the new values of: (i) autonomous gm; (ii) the autonomous spending multiplier (IE: give the result in the form of a whole number); (iii)the equilibrium level of output and compare with their values in the closed economy from point (a). Briey explain the changes. Redraw the graphs with the nal change from point (e) and show the new change. (6) What is the change in government budget compared to the closed economy from point (a)? Give your calculations. What happens to budget decit/surplus compared to point (a) (1) Is there a trade surplus or a trade decit? Give your calculations. What must be the level of output in this economy to have the trade balance? Give your calculations. (g) At the equilibrium income, calculated in point (d), how is investment being nanced in this economy? Give your calculations