question 1. Find equilibrium GDP using the following macroeconomic model (the numbers, with exception of MPC, represent billions of dollars):

C = 1500 + 0.75Y I = 1250

G = 1250

NX =-500

Y = C + I + G + NX

Consumption function

Planned investment function Government spending function Net export function Equilibrium condition

question2. Use a 45-line diagram to illustrate the multiplier effect of a decrease in government

purchases.