The following information is available for a country: Saving Function: S-200 0.4Y Investment Function: 1- 200 The graphs of the saving and investment functions are shown as S, and I respectively 1) Using the point drawing tool, identify the original equilibrium point Label it E Now, suppose all individuals have become more thrifty. For every level of income they plan to save an additional $200. 2) Using the line drawing tool draw the new saving function and label & S 3) Using the point drawing tool identify the new equilibrium point and label it F Note Carefully follow the instructione above and only i the required objects Saving and Investment 000 500 400- 300- 200 100 -100- 296 300 400 1000 Aggregate Output/income S₁ 1500 ROC
The following information is available for a country: Saving Function: S-200 0.4Y Investment Function: 1- 200 The graphs of the saving and investment functions are shown as S, and I respectively 1) Using the point drawing tool, identify the original equilibrium point Label it E Now, suppose all individuals have become more thrifty. For every level of income they plan to save an additional $200. 2) Using the line drawing tool draw the new saving function and label & S 3) Using the point drawing tool identify the new equilibrium point and label it F Note Carefully follow the instructione above and only i the required objects Saving and Investment 000 500 400- 300- 200 100 -100- 296 300 400 1000 Aggregate Output/income S₁ 1500 ROC
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
9
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The following information is available for a country:
Saving Function: S--200-0.4Y
Investment Function: 1 2001
The graphs of the saving and investment functions are shown as S, and I respectively
1) Using the point drawing tool, identify the original equilibrium point. Label it E
Now, suppose all individuals have become more thrifty. For every level of income
they plan to save an additional $200.
2) Using the line drawing tool draw the new saving function and label & S
3) Using the point drawing tool identify the new equilibrium point and label it F
Note: Carefully follow the instructions above and only draw the required objects
Saving and Investment
600-
500
400-
300
200-
100
0-
100-
200
300-
4004
1000
Aggregate Output/income
S₁
1500
o ou
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