Would someone explain to me how to get the answers, please? I need the graphs plotted, the blue box answer, and the fill in the blanks answered. Below are the options.
Options for the first graph: From the preceding data, you know that the level of saving in the economy was ($140 billion, $20 billion, $0 billion, $100 billion) and the marginal propensity to save in the economy is (0.6, 0.8, 0.1, 0.2).
Options for the second graph are:
Suppose that this year, disposable income is projected to be $450 billion. Based on your analysis, you would expect consumption to be ($440 billion, $340 billion, $460 billion, $250 billion) and saving to be ($10 billion, $120 billion, $40 billion, $150 billion).
Thank you!
3. Graphing the saving and consumption functions from the MPC
Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.8. That is, if disposable income increases by $1, consumption increases by 80.
Based on these data, use the blue line (circle symbols) to plot this economy's consumption function on the following graph.
CONSUMPTION (Billions of dollars)
700
Consumption Fn.
600
500
400
300
200
100
-100
0
200
300
400
500
600
700
800
DISPOSABLE INCOME (Billions of dollars)
The autonomous level of consumption in the economy equals billion. Hovering over the line in the graph reveals its slope and intercept.
From the preceding data, you know that the level of saving in the economy last year was marginal propensity to save in this economy is and the.
Using these two facts, plot this economy's saving function on the following graph.
SAVING (Billions of dollars)
700
600
Saving Function
500
400
300
200
100
0
-100
100
200
300
400
500
600
700
800
DISPOSABLE INCOME (Billions of dollars)
Help Clear All
Suppose that this year, disposable income is projected to be $450 billion. Based on your analysis, you would expect consumption to be and saving to be.