Where io and go are exogenous variables and y and c are

Question

Using the simple national income model:

Y = C + I_o + G_o

C = a + bY          

where Io and Go are exogenous variables, and Y and C are endogenous variables, and a, b are constants.

Set up this model in a matrix form and solve for: Y, C in terms of I_o, G_o, a, and b

Determine the impact of changes in Go and Io on Y and C.