Suppose you are the government’s chief economist of country X and after careful
investigation you discover the following economic data apply to your country:

Autonomous consumption = $200 billion
Marginal propensity to consume (MPC) = 0.8
Autonomous investment = $20 billion
Autonomous government spending = $100 billion
Lump sum tax = $50 billion
Proportional tax rate = 0.1
Autonomous exports = $100 billion
Marginal propensity to import (MPM) = 0.12

You also know that the output of country X is currently at its equilibrium level.

Suppose you know that autonomous investment will be changed by $10 billion when interest
rate is changed by 1%, explain the direction and magnitude of changes in interest rate for
country X in order to reach full employment at equilibrium.