Assume the following equations summarize the structure of an open economy:

C= 600 + .9 Yd Consumption Function

T = 300 + .25 Y Tax

I = 800 - 50 i Investment equation

G = 1500 Government Expenditures

NX = 505 Net Export

1- Compute the value of Multiplier (M).

2- Compute the value of planned autonomous expenditure (Ap)

3-Derive the equation for the IS curve.

4- If government spending increases by $400:

a- Derive the new equation for the new IS curve.

b Computer the new equilibrium real GDP if i=10% and i=20%.