3. Consider a simple goods market model: Consumption: C = a + bY Investment: I = Yo - V1i Government expenditure: G = G. (a) Use a diagram of simple Keynesian model (Keynesian cross) to illustrate the equilibrium output. You should clearly indicate the value for the intercept and the equilibrium output in the diagram. (b) Assuming interest rate remains constant, calculate the government multiplier. (c) Call the equilibrium output as Y, after the government expenditure increases by $1 under the assumption in (b). If interest rate is flexible, after the $1 increase in government expenditure, output in the goods-money market equilibrium is Y2. Use a diagram (don't calculate the values) to indicate Y, and Y,. (d) For (b) and (c), we assume general price level is fixed. If price is flexible, the actual output is Y,. Illustrate Y1, Y2, and Y, in the aggregate supply-aggregate demand model and in the IS/LM model