Consider an economy that is characterised by the following set of equations C = co+IVD YD = Y-T I = bu + bly Government spending (G) and taxes ( 7) are constant. Note that investment (/) is proportional to output ()). a) Solve for equilibrium output. b) Using your answer derived in (a) identify and discuss the multiplier. How does the relation between investment and output affect the value of the multiplier? c) For the multiplier to be positive what condition must be satisfied? lease note: The two questions are equally weighted in terms of marks. To help explain your answers nd analysis, you should always attempt to use diagrams, mathematical demonstration where pplicable and convey the economic intuitions behind the results. Do not forget to label your graphs. ey Marking criteria will include: . Initiative: Originality, innovativeness of answer . Assignment Structure: Clarity of aims, objective, structure and presentation . Quality of Writing: Readability and ability to convey key message(s) concisely . Quality/Scope of Literature Review: Understanding of established knowledge . Suitability of Literature. Use of suitable sources, focused to answer key research aims Literature Analysis: Quality/level of analytical skill demonstrated . Insightfulness of Analysis: Interest and usefulness of findings, conclusions drawn Understanding: Assignment demonstrates students have understood key topics . Consistently appropriate and accurate use of diagrams and mathematical expressions . Clear demonstration of economic interpretation relevant to the assignment . Overall Quality of Assignment