Question: Hello Tutor, please help me to solve this question. Thank you. Suppose the United States economy is represented by the following equations: Z = C

Hello Tutor, please help me to solve this question. Thank you.

Suppose the United States economy is represented by the following equations: Z = C + I + G, C = 500 + 0.75YD, T = 600, I = 300, YD = Y T, G = 2000

a. Given the above variables, calculate the equilibrium level of output.

b. Assume that government spending decreases from 2000 to 1900. What is the new equilibrium level of output? How much does income change as a result of this event? What is the multiplier for this economy?

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