Assume a model of the expenditure sector with no government or foreign sector. If the savings function is defined as S = - 300 + (0.15)Y and autonomous investment increases by 100, consumption will increase by _ _ _ _ O $ 85 O $567 O $667 O $150Suppose Megan's real income in the current period is yt and in the future period is yt+1. She pays lump-sum tax of $100 in the current period and 120 in the future period. She saves st in the current period but does not save in the future period and chooses to finish the period with no assets. The real interest in both periods is r. Megan's consumption in the future period, Ct+1 is O yt+1- 120+ r *st O yt+1- 120+ r(yt - ct - 100) O yt+1- 120+(1+r)*(yt - ct - 100) O yt+1-120+r*(yt - st - 100)Interest rate LM A IS Output An economy is on the LM curve at point A. The adjustment process that takes place to achieve equilibrium in both markets is O households' demand for money increases, price of assets goes up, output increases, interest rate decreases. Since both output and interest rate are too high for the goods market equilibrium, the Fed steps in to cut the interest rate, which eventually increases output. O faced with an unplanned decrease in inventory, firms increase production, income increases, demand for real balances increase, interest rate goes up. faced with unplanned increase in inventory, firms decrease production, income decreases, demand for real balances decrease, interest rate goes down. MacBook Pro