Suppose that the economy is characterized by the following behavioral equations: C = 160 + 0.6YD I = 150 , G = 150 , T = 100 , Yd = 900 , C = 700 , Y = 1000

Using the multiplier:

(a) Consider a decline in real GDP of 2%. For the simple economy in question 2, how many units of real GDP equal 2% of equilibrium DGP?

(b) If the 2% decline in real GDP were caused by a reduction in I, how many units would I fall?

(c) If the government wanted to return real GDP to its equilibrium level after the fall in I, would it increase or decrease G? By how many units would it increase or decrease G?