Explain how much is saved at equilibrium

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Reference no: EM1371160

Q. Please see attached question with hint.

S = -$500 + .2Y
Ip = 300
G = T = Xn = 0

a) Illustrate what is consumption function for this economy?

b) Illustrate what is equilibrium level of GDP?

c) Explain how much is saved at equilibrium?

d) If savings fell by $200 at every level of GDP, illustrate what would be equilibrium level of income?

Reference no: EM1371160

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