The autonomous consumptionexpenditures and autonomous investmentexpenditures in an economy are $600 and$350, respectively. It is also observed thatindividuals spend70% of their additional income onconsumption. Write down the consumptionfunction for this economy using theinformation provided above. (Round yourresponse for the intercept term to thenearest whole number and for the slopeterm to one decimal place.)C . +..YWrite down the aggregate expenditurefunction for this economy using theinformation provided above. (Round yourresponse for the intercept term to thenearest whole number and for the slopeterm to one decimal place.)AE =..+..Y•..The equilibrium income that would set theactual national income to the desiredaggregate expenditure is $. (Round yourresponse to the nearest dollar.)If the actual national income were $1,584 inthis economy, then the inventories of thefirms would be failing or risingand firms would reduce or increase theiroutput.

C= Ca + MPC*Y C= 600 + 0.7Y AE = C + I AE = 600 + 0.7Y + 350 AE= 950 + 0.7Y At equilibrium, Y= AE…

Answered: The autonomous consumption expenditures…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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