Question: 4 . ( 4 points ) Numerical problem: I - S model. Suppose that the full - employment level of output = 5 0 0

4.(4 points) Numerical problem: I-S model.
Suppose that the full-employment level of output =5000 and government spending =1000. The desired consumption function is given by Cd =30002000r +0.10Y, and the desired investment function is given by Id =11002000r. Use this information to answer the questions below.
a. Derive an equation that relates Sd, r, and Y (i.e. solve for the National Savings function using the definition for S). Show work.
b. Solve for Equilibrium values of r, S, and I. Calculate and show work.

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