Question 3 Consider an economy described by the following equations: Y = 1000 G = 2000 T = 1500 C = 450 + o.9(Y -T) 1 = 3000 - 30t Compute private savings, public savings, and national savings. Find the equilibrium interest rate. (a) (b) (c) (4 marks) (4 marks) What do the numbers 450 and 0.9 represent in the function? (4 marks) (d) Now suppose that G falls by 500; from (2000 to 150)), using the govemment spending muldplier, calculate the resulting change in ouQut O i. (4 marks) (e) Now suppose taxes increase by 500; from (1500 to 2000), using the tax multiplier, calculate the resulting change in output (Y). (4 marks)