Problem
In a basic Keynesian macroeconomic model it is assumed that Y = C + I where I = 820 and C = 60 + 0.8Y.
(a) What is the marginal propensity to consume?
(b) What is the equilibrium level of Y?
(c) What is the value of the multiplier?
(d) What increase in I is required to increase Y to 5,000?
(e) If this increase takes place will savings (Y - C) still equal I?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.