The simple AD multiplier starts with endogenous consumption as the catalyst of economic growth. How is the multiplier modified by leakages that depend on income levels in the circular economic flows? Show in algebraic notations and explain.

Suppose the government decides to raise taxes that would fully finance a big infrastructure project. Explain the effect on incomes and outputs if: (1) all taxes are autonomous, (2) all taxes are endogenous. Show algebraically.