The consumption function for a closed economy with no government sector is given by the equation: C = £200 million + 0.8 Y where C is aggregate consumption and Y is national income. (i) Calculate the value of aggregate savings if the level of national income is £4000 million. Show all your workings. (ii) Calculate the equilibrium level of national income if the level of planned investment is £600 million. Show all your workings. (iii) Calculate the level of aggregate consumption at the equilibrium level of national mo ift ont ig f1000 Shour ol1

The consumption function for a closed economy with no government sector is given by the equation: C = £200 million + 0.8 Y where C is aggregate consumption and Y is national income. (i) Calculate the value of aggregate savings if the level of national income is £4000 million. Show all your workings. (ii) Calculate the equilibrium level of national income if the level of planned investment is £600 million. Show all your workings. (iii) Calculate the level of aggregate consumption at the equilibrium level of national mo ift ont ig f1000 Shour ol1

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 4TY

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