Assume the following model of the economy, with the price level fixed at 1.0: 800 - 20 r 1.200 T: 1,000 G: 1,000 MS/ p = 0.4 Y - 40 r Assume that MS (the money supply) increases by 200. By how much will Y increase in short-run equilibrium? 3500 What is the multiplier for money supply (the change in Y divided by the change in MS)? 1.25 The government raises taxes by EUR 130 million. Ifthe marginal propensity to consume is 0.7, what happens to the following? Do they rise or fall? By what amounts? 130 a. public saving, 221 b. private saving, -200 c. national saving, -130 d. Investment million EUR million EUR million EUR million EUR