5. Given the following data, answer the following questions:
a. In this economy, compute private saving, public saving, and national saving.
b. Compute the equilibrium interest rate.
c. Suppose G is increased by 250. Compute private saving, public saving, and national saving.
d. Compute the new equilibrium interest rate.
Y = C + I + G
Y = 5000
G = 1000
T = 1000
C = 250 + 0.75 (Y - T)
I = 1000 - 50r
e. Draw the Investment-Saving graph which illustrates this economy.
f. What kind of fiscal policy does this change demonstrate?