2. Given the import function M = f(Y), where M is imports and Y is national...

Transcribed Image Text:

2. Given the import function M = f(Y), where M is imports and Y is national income, express the income elasticity of imports EMY in terms of the propensities to import. 3. Given the consumption function C = a + by (with a > 0; 0 < b < 1): (a) Find its marginal function and its average function. (b) Find the income elasticity of consumption *cy, and determine its sign, assuming Y > 0. (c) Show that this consumption function is inelastic at all positive income levels. 2. Given the import function M = f(Y), where M is imports and Y is national income, express the income elasticity of imports EMY in terms of the propensities to import. 3. Given the consumption function C = a + by (with a > 0; 0 < b < 1): (a) Find its marginal function and its average function. (b) Find the income elasticity of consumption *cy, and determine its sign, assuming Y > 0. (c) Show that this consumption function is inelastic at all positive income levels.

Answer rating: 100% (QA)

Answers to Accounting Questions 1 Income Elasticity of Imports EMY The income elasticity of imports ... View the full answer