- 3 Complete The Following Table Of A Hypothetical Economy All Figures Billion Assume That The Consumption Function 1 (47.39 KiB) Viewed 54 times
3) Complete the following table of a hypothetical economy (all figures $ billion). Assume that the consumption function is a straight line and that investment is constant at all levels of income. Y с S I APC MPC 0 125 125 500 525 1000 1500 2000 2500 a. Complete the table. b. Calculate the breakeven level of income. c. Illustrate the consumption function and aggregate demand. d. Calculate the equilibrium level of national income? Now assume that I increase to $150 billion. Using the concept of multiplier, what will be the new equilibrium level of national income? f. If the full employment level of income is $3500 billion, what is the problem faced by the economy? (Based on the new equilibrium income calculated in part d.) g. Calculate the change in expenditures required in order to achieve the full employment level of e. income.