1. In a simple macroeconomic model, the value of national income Y may be found by solving the system:

G = 250 (government expenditure)

T=50(taxation)I = 100 (planned investment)

C = 0.75Yd + 150 (consumption)

where disposable income Yd = Y T.

(a) Calculate the equilibrium level of national income.

(b) Calculate the total increase in government expenditure and investment needed to increase the equilibrium level of national income by 20.