This is the only information given for this question:

a) By how much does Y increase when G increases by one unit

b) By how much does Y increase when T increases by one unit

c) Why are your answers to a and b different

SUppose that the economy starts with a balanced budget T=G.

d) Suppose that both G and T increase by one unit. Using answers from a and b, what is the change in equilibrium GDP, are balanced budget changes in G and T macroeconomically neutral?

e) How does the specific value of the propensity to consume affect your answer in d, Why?