Suppose the president of a country uses $200 million to build an interstate railway network in the country. The expenditure is entirely financed by borrowing. The government did not borrow any money before building the railway network. Before the government borrowing, the equilibrium amount of savings = $700 million. After the government borrowing, the equilibrium amount of savings = $820 million.

(a) Regarding the expenditure on building the railway network, is it a government spending? (yes or no) (b) Would the equilibrium interest rate increase or decrease after the government borrowing? (increase or decrease)

(c) How much is the amount of firms' investments after the government borrowing? (in millions)

(d) Assume complete crowding out, how much is the decrease in household consumption after the government borrowing? (in millions)

(e) Assume complete crowding out, does AD increase, decrease, or remain unchanged after the government borrowing? (increase, decrease or remain unchanged)