Use the table below (for a simple economy with no foreign sector or government) to answer the questions that follow.
(1)
Income
(Y) |
(2)
Consumption
(C) |
(3)
Investment
(l) |
(4)
Aggregate Demand
AD=C+1 =Column(2) +Column(3) |
| 0 |
30 |
(a) |
50 |
| 300 |
300 |
20 |
(b) |
| 400 |
(c) |
20 |
410 |
| 500 |
480 |
20 |
500 |
| 600 |
(d) |
20 |
(e) |
Fill in the missing numbers in the spaces marked (a)-(c). Determine the consumption function, and use the result to fill in the remaining missing numbers (d)-(e). (f) Determine the equilibrium output level.
