Question: no additional details 6. You are given the following data concerning Freedonia, a leg endary country: (1) Consumption function: C = 200 + 0.8Y (2)

no additional details

6. You are given the following data concerning Freedonia, a leg endary country: (1) Consumption function: C = 200 + 0.8Y (2) Investment function: I = 100 (3) AB 5 C + I (4) AB = Y a. What is the marginal propensity to consume in Freedonia, and what is the marginal propensity to save? b. Graph equations (3) and ( 4) and solve for equilibrium income. c. Suppose equation (2) is changed to (2') I = 110. What is the new equilibrium level of income? By how much does the $10 increase in planned investment change equilibrium incommm

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