C = 100 + 0.75*Y_dConsumption Function

I = 200Investment

G = 300Government Spending

X = 200Exports

IM = 50 + 0.25*Y_dImports

Y_d = Y - TDisposable Income

T = 100Taxes

1.What is the equilibrium GDP(Y)?

2.Find the equation for C - IM in terms of Y (not Y_d)

3.Explain in words what the equation for C - IM in question 2 tells us about the behavior of consumers in this economy.

4.Find the level of savings when this economy is in equilibrium

5.Assuming domestic savings go first to finance domestic investment find the excess savings or the savings deficiency.