Assume that the consumption schedule for a private open economy is such that consumption C = 100 + 0.8Y. Assume further that planned investment I_g, government spending G, and net exports X_n are independent of the level ofreal GDP and constant atI_g = 60, G = 0, and X_n = 10. Recall also that, in equilibrium, the real output produced (Y) is equal to aggregate expenditures: Y = C + I_g + G + X_n.

Round your answers to the nearest whole number.

a. Calculate the equilibrium level of income or real GDP for this economy.

$?

b. What happens to equilibrium Yif I_gchanges to 40?

$?

What does this outcome reveal about the size of the multiplier?

Multiplier = ?