Question: Given the following C = 25 + 0.8Yd I* = 100 and assuming fixed prices a) What is the equilibrium level of NP? b) What

Given the following

C = 25 + 0.8Yd I* = 100

and assuming fixed prices

a) What is the equilibrium level of NP?

b) What is the equilibrium level of savings?

c) What is the value of the multiplier?

d) If planned investment falls 10, ceteris paribus, what is the new level of

equilibrium NP?

e) If the MPC increases to 0.85 what would equilibrium NP be with I*= 100?

f) If the MPS falls to 0.10 what would equilibrium NP be with I*= 100?

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