Consider a closed economy with the following partcipants: households, rental firm, production firm and the government: (a)total production: y = 1. (b ) consumption is given by: c = 7200 − 100r where c is consumption and t is tax. (c) firm: investment i is given by equation i = 3000 − 100r. (d) government collect lump-sum tax t=2000 and spend g=3000. use the condition above to answer the following questions: (1) solve the equilibrium real interest rate r, the equilibrium consumption c and the equilibrium investment i.(2) solve the private saving and the public saving in equilibrium.(3) if the government reduces its spending from 3000 to 2000, solve the value of the consumption and investment. compare your answer with your answers to the previous questions, whether reducing government spending increases investment and consumption or not? explain narratively why reducing government spending changes the investment and consumption

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

this business is a price setter.

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answer; intellectual property protection;

answer///a road map;