Question

In: Economics

Income    (Yd) Consumption Expenditure (C) Saving (S) Investment Expenditure (I) Government Expenditure (G) Net Export...

Income

   (Yd)

Consumption

Expenditure

(C)

Saving

(S)

Investment

Expenditure

(I)

Government

Expenditure

(G)

Net Export

Expenditure

(NX)

Aggregate

Expenditure

(AE)

$8000

$11,000

$2,500

$5,000

$12,500

  12,000

14,000

2,500

5,000

12,500

20,000

20,000

2,500

5,000

12,500

30,000

27,500

2,500

5,000

12,500

50,000

42,500

2,500

5,000

12,500

100,000

80,000

2,500

5,000

12,500

1. Calculate: Savings, MPC, MPS, Multiplier, and the equilibrium level of income (Y = AE = C + I + G + NX).

2. Draw a graph showing disposable income (Yd) on the horizontal axis and aggregate expenditures (AE) on the vertical axis with a 45 degree line. Graph AE (AE = C + I + G + NX) curve on this graph. Indicate break even level of income (Y=C) and equilibrium level of income (AE=Yd).

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