In simple economy (assume there are no taxes, thus Y is disposable income) the c

Question

In  simple economy (assume there are no taxes, thus Y is disposable income) the consumption fuction is

C = 200 + 0.08 Y

The current level of GDP is $6000

At  the level of real GDP, consumption will be_____________, and savings will be________________.

If GDP were to increase by $1000, consumption would increase by______________. (round to the nearest dollar)

At a real GDP level of $6000, the average propensity to consume is_______________, and the average propensity to save is________. (rounnd to two decimal places)

Please help me break this down so I can figure it out.  Thank You.

Explanation / Answer

1) GDP were to increase by $1000

2) $12000

3) $ 6000

4) $ 200

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.