2. Answer the following questions based on the information given below: Autonomous consumption = $10 billion; autonomous investment = $40 billion; autonomous government spending = $35 billion; autonomous exports = $20 billion; autonomous imports = $25 billion and marginal propensity to save = 0.4. mps = 0.4 mpc=0.6 a) Write out the consumption function using the above information. b) Graph the information above on the aggregate income and aggregate expenditure graph. c) Calculate equilibrium income/output. Please show your work. d) Show the equilibrium income/output on the graph.

2. Answer the following questions based on the information given below: Autonomous consumption = $10 billion; autonomous investment = $40 billion; autonomous government spending = $35 billion; autonomous exports = $20 billion; autonomous imports = $25 billion and marginal propensity to save = 0.4. mps = 0.4 mpc=0.6 a) Write out the consumption function using the above information. b) Graph the information above on the aggregate income and aggregate expenditure graph. c) Calculate equilibrium income/output. Please show your work. d) Show the equilibrium income/output on the graph.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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