HW2 PLAESE SEND THE SOLUTION Question: Assume the economy has the following Consumption function: C = 100+ 0.75Yd Investment: I = 100 Government spending: G = 100 Net taxes: T = -25 + 0.2Y Find: a) Find the value of multiplier. What are the factors affect the multiplier. b) Find equilibrium level of income c) Find the effect of an increase in tax by $100 on equilibrium income. d) If Government spending increased from 100 to 200. Find the new equilibrium income. e) If investment change by $ 200, what is the new equilibrium income. f) If tax rate increases from 0.2 to 0.4 prove the value of multiplier will decrease. g) Graph the equilibrium in in b, c, d, e