QUESTION # 4: (Five marks, each part scores one mark) Suppose aggregate saving function is specified as S=-$40+0.25Y, in

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Question 4 Five Marks Each Part Scores One Mark Suppose Aggregate Saving Function Is Specified As S 40 0 25y In 1 (91.42 KiB) Viewed 40 times

QUESTION # 4: (Five marks, each part scores one mark) Suppose aggregate saving function is specified as S=-$40+0.25Y, investment spending is $75, gross exports total $50, and gross imports equal $35 of a hypothetical economy in 2021. Find algebraically: A. The equilibrium level of aggregate output by equating leakages and injections. B. Aggregate saving when aggregate output is at the equilibrium level. C. Aggregate consumption function that is corresponding to the given saving function. D. Aggregate consumption when aggregate output is at the equilibrium level. E. Establish that the equilibrium level of aggregate output equals aggregate spending.