Complete the accompanying table.

Level of output and income

(a) Prepare a graph showing the consumption and saving schedules.

(b) Locate the break-even level of income. How is it possible for households to dis-save at very low income levels?

Transcribed Image Text:

(GDP = DI) $480 520 560 600 640 680 720 760 800 Consumption $488 520 552 584 616 648 680 712 744 Saving APC -$8 1.02 0 1.00 8 0.99 16 0.99 24 0.96 32 0.95 40 0.94 48 0.94 56 0.93 APS MPC -0.2 0.0 0.1 0.3 0.4 0.5 0.6 0.6 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 MPS 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 (GDP = DI) $480 520 560 600 640 680 720 760 800 Consumption $488 520 552 584 616 648 680 712 744 Saving APC -$8 1.02 0 1.00 8 0.99 16 0.99 24 0.96 32 0.95 40 0.94 48 0.94 56 0.93 APS MPC -0.2 0.0 0.1 0.3 0.4 0.5 0.6 0.6 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 MPS 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2

Answer rating: 100% (QA)

GDP DI Consumption Saving APC APS MPC MPS 480 488 8 102 02 08 02 520 520 0 100 ... View the full answer