The information below relates to a closed economy without a government. Use the information to

answer the questions that follow:

Autonomous consumption = $ 285 million;

Autonomous investment = $ 300 million;

Marginal propensity to consume = 0.4.

a) Calculate the level of autonomous spending

b) Calculate the size of the multiplier.

c) Calculate the equilibrium level of income

d) Suppose that the equilibrium level of income is 1 000 and it is below the fullemployment level of income of 1 200.

Calculate the change in investment spending required to reach full employment

e) Discuss the relationship between total income and total spending in the macroeconomy according to Say's law. (Provide harvard referincing)

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I managed to solve other questions:

(a) Co + Io = 285 + 300 = $ 585 million

(b) 1/(1 - c) = 1/(1 - 0.4) = 1/0.6 = 5/3 = 1.67

(c) Ye = (5/3) x 585 = $ 975 million