Consider the following economy for which the parameters have been estimated: < P The desired consumption C= 500 +0.9YD; < The gross investment / 300; < The taxes are T=0.2Y; < The government purchases G = 500; The imports are IM = 0.3Y; e. The exports are X = 600. < d I a. Calculate the marginal propensity to spend. (2) < b. Calculate the simple multiplier (with government & foreign trade). (1) < Find the equilibrium national income (demand determined). (1) C. d. What is the budget balance in the equilibrium national income (demand determined)? Give the number. Is there a budget deficit, surplus, or do we have a balanced budget? (2) If the government had increased its purchases to G=600, other things being equal, what would be the new equilibrium national income (demand determined)? (1)