An economy is characterized by the following equations-Consumption Function = 50 + 0.5Y_d;

Investment = Rs. 350 Crores;

Tax = Rs. 60 Crores;

Government Expenditure = Rs. 200 Crores;

Exports = Rs. 90 Crores;

Imports M = 0.05 Y

Compute:

(a) The equilibrium level of income.

(b) The increase in government expenditure required to ensure that the economy reaches

the full employment level of income of Rs. 1500 crores.