Consider an economy described by the functions below(in millions of shillings at constant prices)

Y = C + I + G

C = 300+0.5Yd

Go = 300

T = -90+0.2Y

I = 120+0.1Y

Yd=y-t

i)Calculate the equilibrium level income(2marks)

ii)Calculate the budget situation at the equilibrium income(2marks)

iii)What is the value of the government expenditure multiplier? How does the fact that both taxes and investment are functions of income affect this multiplier(2 marks)

iv)Show that the change in income generated by decreasing taxes by Shs. 30 billions(by decreasing T) is less than that which would be achieved by decreasing government expenditures by the same amount.Explain why this is so.(2 marks)

v)If equilibrium is shs 300 billion less than full employment income level by how much must government spending be increased in order to obtain full employment budget situation? (2marks)