Assignment 4 Due: 13 May 2020 at 18:00 PART I (6 points) Consider the Keynesian Cross PE = C+1+G whereby C = 100 + 0.5(Y -T) I = 150 G=T = 300 a. Compute and graph the PE schedule as a function of income. (1 point) b. Calculate the equilibrium income and illustrate it in your graph from part a). (1 point) c. If taxes increase to T' = 350, what is the new equilibrium income?' Show the change in the PE schedule graphically. Compute the multiplier for taxes. (Everything else remains the same.) (2 points) d. If government purchases increase to G = 400, what is the new equilibrium income? Show the change in the PE schedule graphically. Compute the multiplier for government purchases. (Everything else remains the same. T = 300.) (2 points)