03-02-2009 84842 PM

03-02-2009 84842 PM - We/ o-f c. Using your answer in part...

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Concept and Calculation Questions Suppose you are given the following information for an economy without government spending, exports, or imports. C is desired consumption, I is desired investment, and Y is income. C and I are given by: C = 1400 + 0.7Y 1 = 400 a. What is the equation for the aggregate expenditure (AE) function? b. Applying the equilibrium condition determine the level of equilibriurruiational income. '
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Unformatted text preview: We/ o-f c. Using your answer in part (b), determine the values of consumption, saving, and investment when the economy is in equilibrium. C /YG-000-.L & ^i * +. V <* ,5 o A ? ""< S * '-w >f X^S | i l s i v n eQiAi''**" d. Prove in general why at equilibrium the desired saving equals to desired investment. iOtL i-r-c s-r-c 6^ X*...
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This note was uploaded on 01/15/2012 for the course ECON 104 taught by Professor Peter during the Summer '09 term at Camosun College.

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