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Question 1 Answer parts (a) - (d) below on the basis of the following table. Income...

Question 1

Answer parts (a) - (d) below on the basis of the following table.

Income
(Y)

Change in Income
(ΔY)

Aggregate Expenditures
(AE)

Change in Aggregate Expenditures
(ΔAE)

0

500

500

950

1000

1400

1500

1850

2000

2300

2500

2750

3000

3200


(a) Fill in columns (2) and (4).
(b) What is the value of autonomous expenditures?
(c) What is the value of the MPE?
(d) What is the AE equation?

Question 2

Answer parts (a) - (e) below based on the AE equation AE = 2,500 + 0.9Y.

(a) What is the level of autonomous expenditures?
(b) If income is 1,000 what is the level of induced expenditures?
(c) What is the MPE?
(d) What is the value of the multiplier?
(e) What is the level of equilibrium income?

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Answer #1

Incomely) AY AE AAE - 500 500 500 950 45o 100 450 500 1400 2.500 1850 450 1500 2000 450 500 0,2300 2 500 450 500 G 026-2750 0

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