Question 3. Suppose that an economy can be described by the following equations: Y=C+I+ G, Y=5,000, G= 1,000, T=1,000, C= 250 + 0.75(Y-T), I= 1,000 – 50r. a. In this economy, compute private saving, public saving, and national saving b. Find the equilibrium interest rate (measured in percentage points). c. Now suppose that G rises to 1,250. Compute private saving, public saving and national saving. d. Find the new equilibrium interest rate.

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