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An economy is characterised by the following relationships:
C=500 + 0.6YI = 300
a) Plot the aggregate expenditure and 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) Calculate the marginal propensity to save for this economy.
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