need answers of number 8,9 and 10

& Investment and income This problem examines the implications of allowing investment to depend on output. Chapter 5 carries this analysis much further and introduces an essential relation-the effect of the interest rate on investment-not examined in this problem. a. Suppose the economy is characterized by the following behavioral equations: C = co + CYD YD = Y - T 1 = bo + bY Government spending and taxes are constant. Note that investment now increases with output. (Chapter 5 discusses the reasons for this relation.) Solve for equilib rium output. b. What is the value of the multiplier? How does the relation between investment and output affect the value of the multiplier? For the multiplier to be positive, what condition must (c1 + bj ) satisfy? Explain your answers. c. What would happen if (c1 + bj) > 1? (Trick question. Think about what happens in each round of spending). d. Suppose that the parameter bo, sometimes called business confidence, increases. How will equilibrium output be af- fected? Will investment change by more or less than the change in bo? Why? What will happen to national saving? EXPLORE FURTHER 9, The paradox of saving revisited You should be able to complete this question without doing any algebra, although you may find making a diagram helpful for part a. For this problem, you do not need to calculate the magnitudes of changes in economic variables-only the direction of change. a. Consider the economy described in Problem 8. Suppose that consumers decide to consume less (and therefore to save more) for any given amount of disposable income. Specifically, assume that consumer confidence (co) falls. What will happen to output? b. As a result of the effect on output you determined in part a, what will happen to investment? What will hap- 87 pen to public saving? What will happen to private saving? Explain. (Hint: Consider the saving-equals-investment characterization of equilibrium.) What is the effect on consumption? c. Suppose that consumers had decided to increase con- sumption expenditure, so that co had increased. What would have been the effect on output, investment, and pri- vate saving in this case? Explain. What would have been the effect on consumption? d. Comment on the following logic: "When output is too low, what is needed is an increase in demand for goods and ser- vices. Investment is one component of demand, and sav- ing equals investment. Therefore, if the government could just convince households to attempt to save more, then investment, and output, would increase." Output is not the only variable that affects investment. As we develop our model of the economy, we will revisit the paradox of saving in future chapter problems. Greece's usage of fiscal policy to avoid the meltdown and the debt crisis As a result of the combined effects of the global financial crisis and the sovereign debt crisis, the GDP of Greece declined from (281.44 billion in 2008 to E176.5 billion in 2015. a. What is the percentage change of GDP during this period? b. By how much should autonomous expenditure have risen in order to prevent the slide in the GDP of Greece, given that marginal propensity to consume is 0.6? c. In reference to your reply to part (b), explain why the Greek Parliament refused the austerity measures that lender na- tions sanctioned for Greece. d. The Greek reform program aimed to improve incentives to private investors. By how much do these incentives alone improve GDP if they have increased investment by E15.5 billion