Please answer both parts of the question with a thorough explanation.

Crowding out with algebra. Consider an economy described by the following model. K: 1000; L= 1000 G = 100 T = 100 C = 250 + O.5(Y-'D I = 600 100r i. Calculate the equilibrium real interest rate, national saving, public saving, private saving, consumption, output, and investment. List your numbers out like this: S = [number] I = [number] At the end type up a very brief outline of your work (e.g. "I set up this equation [equation] and then plugged in for everything to get [new version] and then solved for [variable name]\" or "I plugged r into |(r) to get I = [number].\" You don't need to show all the algebra steps.) ii. Suppose the government increases G to 250. Repeat your calculations to nd the new real interest rate, national saving, and investment. You only need to report the numbers since your method should be the same as in part (i). (continued from the previous question) If modify the consumption function to it depends on r, as discussed briey in the textbook, we can make S depend on rwhich is more realistic. i. Which consumption function would make S(r) increase with the real interest rate? Briefly explain your choice. c = 450 + 0.5(Y-T) 50r OR c = 50 + 0.5(Y-T) + 50r ii. Is there more, less, or the same amount of crowding out when G increases in this modified version? (In other words, repeat question 9 but with the new S(r) function.) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)