Given the following equations for an open economy: Y = C + I^P + G + NX

C = 500 + 0.8 Y_D where Y_D is disposable income

I^P = 70

G = 100

T = 50, where T is lump sum tax

NX = 70

Solve for the following:

a) Equilibirum Income

b) Income-Expenditure Multiplier for G

Assume that potential output is 3000. Given the equilbirum income solved previously, there is (c); and its unemployment is (d) its natural rate of unemployment.

e) What is the change in G necessary to eliminate the output gap? (G is a negative number)