b. Assume that G is now equal to 1100. Solve for equilibrium output. Compute total demand. Is it equal to production? Explain. Y = 1200 + 0.8 *(Y -100 - 0.15*Y) + 480 + 0.2*Y + 1100 Y - 2400 + 300 +0.88*Y Y = 2700/0.12 =22.500 If G is increased from 800 to 1100 (i.e. an expansionary fiscal policy), the total demand curve ZZ needs to shift up