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Consider a simple model like the one developed in this chapter. The following equations show the levels of desired consumptio

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Answer #1

Answer:

C=400 + 0.8Y

I = 100

Y($)

C($) { C=400+0.8Y}

 I($) AE ($) {AE = C+I}
0 400 100 500
1250 400 + 0.8(1250) = 1400 100 1500
2500 400 + 0.8 (2500) = 2400 100 2500
3750 400 + 0.8 (3750) = 3400 100 3500
5000 400 + 0.8(5000) = 4400 100 4500
6250 400 + 0.8 (6250) = 5400 100 5500
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