Using the classical model of chapter 3, suppose taxes decrease by $100 while government spending is constant. Also, the marginal propensity to consume is 0.90. For a, b, and c below, tell how much each of the following change, if at all, and in which direction. For d, just tell me which direction
a. Real Gross Domestic Product
b. National savings (Y- C – G)
c. Investment Spending
d. Real Interest Rates