Refer to the economy in Problem 2.

a. Calculate the private savings, public savings, and investment spending.

b. Calculate the multiplier and explain how it affects equilibrium output.

c. Suppose that the government decides to increase its spending from \(€ 250\) billion to \(€ 300\) billion. Find the equilibrium output, consumption, and disposable income. Why would the government decide to expand fiscal spending?

Data from problem 2 

The following equations refer to the goods market of an economy in billions of euros:
\[
\begin{aligned}
C & =480+0.5 Y_{D} \\
I & =110 \\
T & =70 \\
G & =250 \end{aligned}
\]