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ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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
Transcribed Image Text:2. Answer the following questions based on the information given below:
Autonomous consumption = $10 billion; autonomous investment = $40 billion;
autonomous government spending = $35 billion; autonomous exports = $20 billion;
autonomous imports = $25 billion and marginal propensity to save = 0.4. mps = 0.4 mpc=0.6
a) Write out the consumption function using the above information.
b) Graph the information above on the aggregate income and aggregate expenditure
graph.
Calculate equilibrium income/output. Please show your work.
d) Show the equilibrium income/output on the graph.
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