The Canadian economy is described below.

C = 50 + 0.8YD (Consumption)

I = 300 (Investment spending)

G = 120 (Government purchases)

NT = 0.1Y (Percentage taxes)

X = 130 (Exports are constant)

IM = 0.22Y (Imports depend positively on our own Y)

Note:Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places.

a)Calculate the equilibrium Y.

Equilibrium =

b)Find the autonomous multiplier.

Multiplier =

c)Find the government budget balance (BB), given your Y in (a).

Budget Balance =

d)Oil prices have been rising recently. Higher crude oil prices translate to higher costs for gasoline, plastic and many products. Suppose the higher oil prices translate to our investment spending dropping from 300 to 100 due to a weaker investment confidence. Find the new Y.

New Equilibrium =

e)Find the BB as a result of the drop in investment spending.

Budget Balance =

f)Is this change in BB due to an increase in government spending, i.e., is the Canadian government to be blamed? Yes or No?

g)Suppose the government wants to push the economy back to the Y level in (a) but with the investment spending still at I = 100. Find the new G necessary.

New Government Purchases =

h)Also find new BB with the government spending in (g) and the investment spending = 100.

New Budget Balance =