Fiscal policy and investment. Read Focus Box "Deficit Reduction: Good or Bad for Investment?" In each case below, there is a fiscal consolidation. Remember that equilibrium condition in good markets can also be written I = S + (T G) a. How does this fiscal consolidation increase public saving? Calculate the change in public saving and the change in pri- vate saving? What must happen to the target interest rate for this policy to describe the changes in parts a, b, and c? Year Y G T S Pre-policy 1000 500 200 300 200 Post-policy 950 400 300 250 250 b. Year Y C G S Pre-policy 1000 500 200 300 200 Post-policy 900 450 250 200 200 . Year Y G Pre-policy 1000 500 200 300 200 Post-policy 975 480 195 300 300