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Question four The following relationships hold in economy of Matata Island: (7 = 320 + 0.40! T) I=150 G=275 T=200 a) Explain the concepts of marginal propensity to consume (MPC) and marginal propensity to save (MP3). b) What is the MPC for this economy? c) Explain the concepts of the autonomous spending and tax multipliers. d) What is the autonomous spending multiplier for this economy? e) What is the equilibrium level of income for this economy? f) Suppose that the full employment level of output for this economy is 4000. What sort of output gap is Matata island facing? g) What kind of policy can the government use to close this kind of gap? Explain with the aid of a diagram