Question: A. Assume that the consumption function is C = 1208 + 0.6 (Y-T). Also, assume I is 300B, G is 600B, and T is 500B.

A. Assume that the consumption function is C = 1208 + 0.6 (Y-T). Also, assume I is 300B, G is 600B, and T is 500B. [Note: MPC = .6.] Use the formula Y = [Co + MPC(Y-T)] + 1 + G to mathematically solve for the equilibrium level of income Y. Show your work. B. If government spending (G) increases to 7008, what is the new equilibrium income (Y)? What is the multiplier for government purchases? . Note: you do not need to show your calculations

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