Assume the following parameters for a closed economy:

C = 150 + .8(YD) I= 500 G =500T = 450 Full-employment Y = 4000 Equilibrium income is 3,950, Consumption spending at equilibrium is 2,950.

A. At equilibrium, what is the amount of private saving? And public saving? please show work.

B. List the leakages and injections and provide a numerical value for each of them at the equilibrium

value you calculated above, demonstrating as you do so that "leakages = injections at equilibrium."

C. Now, assume that investment spending falls by 20. First, show the decline in I on your diagram on

the previous page by adding the new (lower) aggregate expenditure line.