Question

Consider the following table showing aggregate consumption expenditures and disposable income. All values are expressed in bi

$ Use the line drawing tool to draw and label the savings function on the diam at right. Make sure that the line extends from

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Answer #1

A) table

Yd C S = Yd - C
0 100 -100
100 180 -80
200 260 -60
300 340 -40
400 420 -20
500 500 0
600 580 20

100 400 500 600 700 800 V Savings (5)

Slope = dS/dY = 20/100 = .2

b) MPS = .2, MPC= .8, sum equals 1

c) eqn

S = -100 + .2Yd

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