Please help me with this question!!!
Equation (1): C = aY + b
where C is consumption, a is the marginal propensity to consume, b is autonomous consumption, and Y is GDP.
1. Suppose a country was comprised of two regions, A and B. The GDP of each region is given by YA and YB, respectively. Assuming equation 1 holds, write down an expression for the whole country's GDP and its level of consumption.
2. Re-write the equation as a formula for the level of GDP in region B (denoted YB), as a function YB (C,YA ) of total consumption (C) and GDP in region A (YA ).
3. Treating GDP in region A as a fixed number, sketch this function with GDP in region B on the vertical axis and consumption on the horizontal axis.