Macro Business Economics Short Questions 1) You are given a model of aggregate demand for a closed economy, so exports X=0 and imports M = 0. You have variables National income (GDP) Y, aggregate consumption, C, savings, S, investment, /, government expenditure, G, net taxation 7, and disposable income, Yo = Y-7 with: C = 0.8Y T= 0.125Y G = 1,500, I = 600, a) State the two versions of the equilibrium condition which must hold, using both words and symbols. b) By obtaining an expression for savings in terms of national income, demonstrate that in equilibrium, national income Y* = 7000. c) The government estimates the full employment level of national income to be Y= = 7600, and that it proposes to close that gap by increasing government spending. Given the marginal propensity to consume out of domestic income, moc. = 0.7, calculate the required increase in government spending