Consider a closed economy described by the following equations = 5000, = 1000, = 1000, = 100 + 0.75, = 1000 10 Where Y is the total income (GDP) G is the government expenditure, T are the taxes, C is the aggregate consumption that depended on disposable income and I is the investment function that assume to be negatively related with the interest rate

a) From this economy calculate private, public and national savings

b) Use the income expenditure identity to calculate the equilibrium interest rate

c) Now suppose that G increases to 1500, everything else constant. Calculate the private, public and national savings in this case

d) Find the new equilibrium interest rate. Comment your answer