You are given the following information about a hypothetical economy;

C = 800 + 0.75Y

I = 500

G = 900

Where

C = Consumption

I = Investment

G = Government spending

(i) Compute the equilibrium level of national output and consumption.

(ii) What is the size of government expenditure multiplier

(iii) Interpret the government expenditure multiplier in 1 (b) (ii) above