Compute the marginal propensity to save for this economy

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Reference no: EM1310430

Q. Q1. An economy is characterized by the following relationships:
C = 500 + 0.6Y
I = 300

a) Plot the aggregate expenditure also aggregate supply curves for incomes ranging from 500 to 3,000.

b) Compute the equilibrium level of income.

c) Illustrate what is the level of consumption at the equilibrium level of income?

d) Compute the marginal propensity to save for this economy

Q2. Assume a firm is collecting $1250 in total revenues also the total cost of its variable factors of production are $1000 at its current level of output. In the short run 1 can predict that the firm will?

Reference no: EM1310430

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