Please do it in MS Word, along with diagrams and boxes. You may use the drawing options of MS Word or Paint or anything you are comfortable with. Hand-drawn diagrams will be accepted

Question 4: 11 marks a) Given the following values of consumption, investment, and government purchases (all in (in millions of $) at three point of Real GDP, calculate (in millions of $) and plot the Total Expenditures curve. (3 marks) Real Consumption Investment Governmen Total Expenditure GDP t Purchases 500 50 200 750 80 400 1000 100 600 b) On the same diagram, draw the TP curve. Explain the reason behind the shape and position of the TP curve. (2 marks) c) Given, optimal inventory is $500 million worth of goods, TE = $2000 million worth of goods and TP = $2300 million worth of goods, how will the economy adjust to achieve equilibrium? (3 marks) d) Assume the economy is in recessionary gap. On the same diagram you in part a), show this case. If the government intervenes using fiscal policy, what sort of policy would they use? Which curve would they shift and why? Draw this shift on the same diagram