Question: Consider a simple model like the one developed in this chapter. The following equations show the levels of desired consumption and desired investment: C

Consider a simple model like the one developed in this chapter. The

Consider a simple model like the one developed in this chapter. The following equations show the levels of desired consumption and desired investment: C = 500 + 0.9Y 1 = 100 %3D %3D AE 2 000 4 000 6 000 8 000 10 000 a. Complete the table above. b. What is autonomous expenditure in this simple model? c. Notice the notation used here for income, Y, which represents national income, as opposed to Y, which represents disposable income. Explain why the two terms are interchangeable in this model. d. What is the equilibrium level of national income in this model? Why?

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