Suppose a structural model of a three sector economy is given as follows:

C = 200 + 0.8 (Y-T)

I = Rs 100 million

G = Rs 150 million

T = 50 + 0.2Y

Find:

a) National Income Equilibrium. b) What happens to the national income if government expenditure decreased to Rs 100 million and investment increased to Rs 150 million