Use the point drawing tool to plot and label the equilibrium level of income. Carefully follow the instructions above, and only draw the required object.

ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter9: Aggregate Demand
Section: Chapter Questions
Problem 4.8P
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The desired aggregate expenditure function of an economy is illustrated in the graph to the right. The
dashed line, Y*, shows the potential level of national income in this economy. The marginal propensity
to spend is 0.75.
Use the point drawing tool to plot and label the equilibrium level of income.
Carefully follow the instructions above, and only draw the required object.
Desired Aggregate Expenditure ($ billions)
3,750-
3,000-
2,250-
1,500+
750 500
0-
Aggregate Expenditure Function
0
45 line
AE
Y = 3,000
4,000
1,000
2,000
3,000
Actual National Income ($ billions)
Transcribed Image Text:The desired aggregate expenditure function of an economy is illustrated in the graph to the right. The dashed line, Y*, shows the potential level of national income in this economy. The marginal propensity to spend is 0.75. Use the point drawing tool to plot and label the equilibrium level of income. Carefully follow the instructions above, and only draw the required object. Desired Aggregate Expenditure ($ billions) 3,750- 3,000- 2,250- 1,500+ 750 500 0- Aggregate Expenditure Function 0 45 line AE Y = 3,000 4,000 1,000 2,000 3,000 Actual National Income ($ billions)
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