Consider a small open economy described by the following equations:

Y = C + I + G + X - M

C = 150 + 0.8(Y-T)

I = 300

G = 150

X = 70

M = 0.2Y

T = 50 + tY

where Y is GDP, C is consumption, I is investment, G is government expenditures, X is exports, M is imports, T is taxes, and t is the tax rate on income. If the economy were at its natural level of output (i.e., full employment), GDP would be 1000. (Total marks = 20)