A. Calculate the levels of consumption and savings that occurs when the economy is in equilibrium. B. Computer the government budget deficit in this economy. C. If government spending in banana land increases by $1000 what is the amount of the increase in equilibrium output? D. If taxes in banana land decrease by $1000 what is the new equilibrium output in this economy? E. To keep the government budget balanced, of both government spending and taxes in banana land increase by $1000 what is the change in equilibrium income level?

d. The federal budget is brought into balance by reducing grants to provincial governments. 4. High and rising health care expenditures are one important element that has contributed to provincial government deficits. New, or additional, payroll taxes may be one way to finance the higher health care costs. If adopted, how would the higher payroll taxes affect the size of the provincial budgets? How would this affect the role of government in the economy? 5. Proponents argue that the government guarantees on loans to students do not result in an increase in government snending since only "loanc" aro involvod