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The following data relate to the economy of XYZ

The following data relate to the economy of XYZ
Shilling “million”
Investment 4,000
Government Spending 10,000
Autonomous consumption 8,000
Net exports 3,600
The marginal propensity to save of the economy of country XYZ is 0.4
Required:
The consumption function of the economy. (1 marks)
The equilibrium level of income in the economy. (3 marks)

Answers


Joseph
i. consumption function C =8000000+0.6Y
ii. Equilibrium income Y=AD(I+C+G+netX)
= 64000000/=
Erwoti answered the question on June 22, 2018 at 20:34

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