Consider an economy characterized by the following equations: C=750 +0.75Y+0.05W 1=250 where C is desired consumption, I is desired investment, W is household wealth, and Y is national income. a. Suppose wealth is constant at W = 12,000. Use the line drawing tool to draw and label the aggregate expenditure function on a scale diagram along with the 45° line to the right. Make sure that the line starts at y-axis and extends to the right. Carefully follow the instructions above, and only draw the required objects. Desired Aggregate Expenditures Aggregate Expenditure and Equilibrium 10,000 9,000+ 8,000+ 7,000- 6,000+ 5,000+ 4,000- 3,000+ 2,000- 1,000+ 0- 0 45° line 2,000 4,000 6,000 8,000 Actual National Income 10,000 Q Q

Consider an economy characterized by the following equations: C=750 +0.75Y+0.05W 1=250 where C is desired consumption, I is desired investment, W is household wealth, and Y is national income. a. Suppose wealth is constant at W = 12,000. Use the line drawing tool to draw and label the aggregate expenditure function on a scale diagram along with the 45° line to the right. Make sure that the line starts at y-axis and extends to the right. Carefully follow the instructions above, and only draw the required objects. Desired Aggregate Expenditures Aggregate Expenditure and Equilibrium 10,000 9,000+ 8,000+ 7,000- 6,000+ 5,000+ 4,000- 3,000+ 2,000- 1,000+ 0- 0 45° line 2,000 4,000 6,000 8,000 Actual National Income 10,000 Q Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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