Check my work Savings and Income Exercise 2 Suppose you have the following dispo

Question

Check my work Savings and Income Exercise 2 Suppose you have the following disposable income and consumption data for an economy, as shown in the table below. a. Using this data, compute the value for savings at each level of disposable income. Instructions: Include a negative sign () when necessary. Disposable Income Consumption (dollars) $20,000 Savings (dollars) (dollars) $22,0002000 21 22,000 23,000 24,000 25,000 26,000 27,000 28,000 22,500 23,000 23,500 24,000 24,500 25,500 26,000 b. Using the information in the table, plot the points on a graph and use them to draw the savings schedule for this economy Instructions: Use the tool provided 'S' to plot the line point by point (9 points total). Savinas Schedule Prev7 of 30Next >

Explanation / Answer

C) The equilibrium level of GDP is where disposable imcome=Consumption i.e. Saving=0 is $24000

D) Slope of saving curve=MPS=change in S/Change in Yd=500/1000=0.5

E)Y=Ca+c(Y-T)

Y-cY=Ca-cT

Y=(Ca-cT)/1-c

Thus slope of Consumption curve=Slope of aggregate expenditure=0.5

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

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