d) At equilibrium, what is the level of saving in Peru? Show your work. On a separate graph, draw the saving function. Label your horizontal axis income/output (Y) and your vertical axis saving (S). Label the vertical intercept and horizontal intercept. e) The President of Peru hires you as an economic consultant. He is concerned that the output level in Vulcan is too high and that this will cause prices to rise. He feels that it is necessary to reduce output by $10 billion. He is given the following 4 recommendations for the use of fiscal policy a. reduce government purchases by $4 billion b. increase taxes by $10 billion c. reduce government purchases by $10 billion d. increase taxes by $2.5 billion

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