Question 3 Consider the following closed economy: C = 100 + c1 X yD, I = 50, G = 100, T = 100, To = 50 Suppose C1 = 0.8 (1) Derive the equilibrium level of output (Y) in the goods market: (2) Calculate the Keynesian multiplier for this economy (2).1. What does this multiplier represent? (Interpretation) (2).2. When does this multiplier get bigger?(3) Assume the Government sets the target Y to be 1,100. (3).1. Suppose the Government can only modify the level of its spending (G). What would be the new level of G that can achieve Y = 1,100 (Assume, c_0, c_1, I, T, and T_G do not change) (3).2. Now, suppose the Government can only modify the level of Tc. What would be the new level of To that can achieve Y = 1,100?(3).3. Compare the size of |AG | from (3).1. and |ATc| from (3).2. (In the absolute terms) Which one is greater? Can you explain why this is the case