Suppose desired investment for the economy represented in, Ask an Expert

Economics

Consider the following consumption function:

Disposable Consumption

Income Expenditure

($ billions) ($ billions)

900 750

1000 800

1100 850

1200 900

1300 950

1400 1000

Suppose desired investment for the economy represented in the table above is $200 billion. Plot the consumption and investment function.

What value is the equilibrium level of income?

What is the marginal propensity to consume?

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Microeconomics, Economics

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