Suppose that there is aclosedeconomywith

C=300+0.8Y I=100 G=200

A.Calculate the government expenditure multiplier.

B.What is the equilibrium level of output?

C.At the equilibrium level of output inB), whatarethevaluesofconsumption and savings?

D.Base on the following descriptions of crowding out effect,

(1) every $10 changes in G leads $5 changes in Md;

(2) interest rate (r) changesby1% resulting from every $5 changes in Md;

(3) interest rate changes by 1%, investment changes by $3;

Find out the final change of equilibrium output if government would like to increase government spending by $100.