Use the following information

:

Consumption Function: C=0.6(DI)+20

I=155 - 10r, where r is the real interest rate

Nominal interest rate=8%

Inflation rate=3%

G=450

EX=60

IM=20

Y=income=2000

T=taxes=200

a)What is the equilibrium level of real GDP?

b)If there is an increase in corporate taxes, would we expect the equilibrium level of real GDP to

increase or decrease? What component is driving this change (C, I, G, or NX)?