Consider the economy described in lecture 3 (a closed economy, the factors of produc- tion are in fixed supply and fully used, prices adjust to balance supply and demand, etc). Consumption is a linear function of disposable income and the marginal propen- sity to consume is 0.8. Finally, the marginal product of labor is 20. Calculate the change in saving in each of the following scenarios:

(a) Government expenditures increase by 60.

(b) Taxes increase by 80.

(c) Total income increases by 60 (i.e., Y = 60).

(d) The labor supply increases by 12 (i.e., L = 12).