. a) Taxes typically depend on the level of income and so tend to be higher when income is higher. Consider the following behavioural equations (20 points) C = C0 + 1YD T = to + tlY YD = Y T G and I are both constant. Assume that 1:1 is between 0 and l. Solve for equilibrium output? What is the multiplier? Does the economy respond more to changes in autonomous spending when t1 is 0 or when :1 is positive? Explain. Why is scal policy in this case called an autonomous stabilizer? b) During a recession, consumers may want to save more to provide themselves with a reserve to cushion possible job losses. Describe the impact of an exogenous decrease in consumption on equilibrium level of income in the economy. Will aggregate national saving increase? Explain using equations and words. c) Two identical countries, Country A and Country B, can each described by a Keynesian model. The MPC is 0.9 in each country. Country A decides to increase spending by $2 billion, while Country B decides to cut taxes by $2 billion. In which country will the new equilibrium level of income be greater? Show you calculation