Working with a Model. An economy has the following dimensions: C = 100 + 0.5 (y - T) I = 50 G = 50 T = 20 a. Draw the income-expenditure graph for this economy. b. Find the equilibrium income and...

Working with a Model. An economy has the following dimensions:

C = 100 + 0.5 (y - T) I = 50 G = 50 T = 20

a. Draw the income-expenditure graph for this economy.

b. Find the equilibrium income and plot it on the graph.

c. What is the multiplier for government spending?

d. Find the savings function.

e. What is the level of savings when the economy is in equilibrium?

f. Show that at equilibrium S + T = I + G.