Question 3 Consider an economy described by the following equations: Y = C+1+G Y = 1000 G = 2000 T = 1500 C = 450 + 0.9(Y -T) I = 3000 - 30r (a) Compute private savings, public savings, and national savings. (4 marks) (b) Find the equilibrium interest rate. (4 marks) (c) What do the numbers 450 and 0.9 represent in the consumption function? (4 marks) (d) Now suppose that G falls by 500; from (2000 to 150 1), using the government spending multiplier, calculate the resulting change in output (Y ). (4 marks) (e) Now suppose taxes increase by 500; from (1500 to 2: 100), using the tax multiplier, calculate the resulting change in output (Y). (4 marks)