Instructions: 1. Submit the completed assignment on Canvas in .pdf or .doc. 2. Refer to the syllabus for the requirements and policies of the assignments. Question One (10 Marks) Suppose an economy is represented by the following equations: Z=C+I+G C=400+0.5YD YD=Y~T r=400 1:200 6:600 Answer the following questions, and include your working steps: a) What is the marginal propensity to consumer? What is the marginal propensity to save? How would you interpret them? (4 Marks) b) Write out the equation that indicates how demand (Z) is a function of income (Y) and the remaining autonomous expenditure. What will be the level of demand if Y = 0? What does this level of demand represent? Furthermore, given your equation, what will happen to the level of demand (Z) as Y increases by $1? What does this number represent? (6 Marks) Question Two (10 Marks) Suppose an economy is described by the following equations: Z=C+I+G C = 300+0.9rD YD =YT T=1000 i= 200 G = 2000 Answer the following questions, and include your working steps: a) Calculate the equilibrium level of output. (4 Marks) b) After you have calculated the equilibrium income, calculate the level of consumption at this level of output. (3 Marks) c) Write out the saving function for this economy. Then, calculate the level of saving that occurs at the equilibrium level of output