Question: 8.1: On the accompanying graph1 draw the consumption function C = $200 + 0.75YD. $1.000 900 800 ii: 700 a E 600 2 g 500


8.1: On the accompanying graph1 draw the consumption function C = $200 + 0.75YD. $1.000 900 800 ii: 700 a E 600 2 g 500 a c 400 n. E g 300 8 200 100 El 0 $100 200 300 400 500 600 700 800 9001.000 DISPOSABLE INCOME ($ billions per year) a. At what level of income do households begin to save? Designate that point on the graph with the letter A. b. By how much does consumption increase when income rises $200 beyond point A? Designate this new level of consumption with point B
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