You are given the following data concerning Freedonia, a legendary country: (1) Consumption function: C = 200 + 0.8Y

(2) Investment function: I = 100

(3) AE =C + I

(4) AE = Y

a. Calculate the marginal propensity to consume in Freedonia, and evaluate is the marginal propensity to save?

. Using equations (3) and (4) and solve for equilibrium income. c. Suppose equation (2) is changed to (2) I = 110.Calculate the new equilibrium level of income? By how much does the $10 increase in planned investment change equilibrium income? Find is the value of the multiplier?