need help with g and h if you can:)

g) Now suppose that the Democrats in Congress convince the Republicans to raise taxes to balance the budget. Recalculate your answers to parts a through e to reflect this new policy Budget Balance C Private Saving National Saving w Investment I r h) In a few words, briefly explain how the this policy change has affected the real interest rate? (Hint: the policy change is similar to one illustrated in Figure 3-10 on page 73 of our text book.) 3. Suppose that output in the U.S. economy is observed to be 5,000 units (Y-5,000). We also observe that government spending (G) is 1,100 units and taxes (T) are 1,000 units. a) What is the government budget balance? Is the government budget in surplus or deficit? Budget Balance 1100 WAN b) Suppose that consumption can be predicted with the following consumption function: C = 250 + 0.75 * (Y-T) c) Based on the information provided in part a, what should be the observed level of consumption in the U.S.? =3250 d) What is the level of private saving? whlt is the level of national saving? What should be the corresponding level of investment, if the economy is in equilibrium? Private Saving 750 National Saving 650 W Investment 1650 g) Now suppose that the Democrats in Congress convince the Republicans to raise taxes to balance the budget. Recalculate your answers to parts a through e to reflect this new policy Budget Balance C Private Saving National Saving w Investment I r h) In a few words, briefly explain how the this policy change has affected the real interest rate? (Hint: the policy change is similar to one illustrated in Figure 3-10 on page 73 of our text book.) 3. Suppose that output in the U.S. economy is observed to be 5,000 units (Y-5,000). We also observe that government spending (G) is 1,100 units and taxes (T) are 1,000 units. a) What is the government budget balance? Is the government budget in surplus or deficit? Budget Balance 1100 WAN b) Suppose that consumption can be predicted with the following consumption function: C = 250 + 0.75 * (Y-T) c) Based on the information provided in part a, what should be the observed level of consumption in the U.S.? =3250 d) What is the level of private saving? whlt is the level of national saving? What should be the corresponding level of investment, if the economy is in equilibrium? Private Saving 750 National Saving 650 W Investment 1650