If the consumption function is of the form [C=80 + 0.4Y], the MPS equals Select one: a. 0.6. b. -0.6. c. 0.4. d. -0.4.

Assume that specific functional forms are assumed for the consumption function and the investment demand function: C = c1(Y; – G;) + c2(Y;+1- G++1) – C3ri I = -dır: + d2At+1+ d3Kt Where c1, C2, c3, di, dzand d3are fixed parameters governing the sensitivity of consumption and investment to different relevant decision factors. a) Find an algebraic expression of the IS (Investment-Savings) curve. b) Use the above expression to find the slope of the IS curve. C) Assume that the parameter values are: C1 = 0.6, c2 = 0.5, c3 = 10, dı = 20, d2 = 1 and d3 = 0.5. Assume that Yt+1 = 15, Gt = 10, Gt+1 = 10, At+1 = 5 and Kt = 15. Assume that rt = 0.1. Find the product in the current period. d) Now suppose ri = 0.15. Find the product Y in the current period. (e) Create a range of values of r, between 0.01 to 0.2, with 0.001 intervals between values. Find Y for each r:using an Excel sheet and draw the IS curve. Does it have the expected slope? Comment f) Find another version of the IS curve with A…

Assume that the level of autonomous consumption rises. Show in a graph what happens to the consumption function. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

Advanced analysis) Assume the following consumption schedule: C = 20 + 0.9Y, where C is consumption and Y is disposable income. At a(n) $1,200 level of disposable income, the level of saving is