Question 1: Consider an economy defined by the following (in Sbillions and price level is fixed }: C = 25 + 0.6Yd T = 10 + 0.15Y | = 30 G = 40 X = 15 M = GDP! 3} What is the marginal propensity to spend and the aggregate expenditure b) fl g) h) multiplier ? What is the equilibrium level of national income ? Indicate the equilibrium on an appropriate diagram What is the level of private saving when the economy is in equilibrium ?What is the level of public saving (i.e.government budget surplus )? If the level of national income were below the equilibrium level of national income ,how would firms respond ?Why ? Suppose that the Government decreases taxes by $2 billion .What is the impact on autonomous expenditure and equilibrium income ? Suppose instead that the Government increases spending by $2 billion .What is the impact on autonomous expenditure and equilibrium income ? Why does this differ from your answer in part (d)? Suppose that there is an exogenous increase in exports to foreign markets Exports increase from 15 to 25. What happens to the equilibrium level of national income