Question 9 (10 marks) Figure 9 shows trends in TWO importance economic indicators between 2001 and 2018: Consumer spending in thousands of AED and nominal GDP in thousands of AED. Figure 9: Consumer spending and nominal GDP (GDP at market price) in thousands of AED (https://fcsa.gov.ae/en-us) 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 2001 200 2003 2004 2005 200 2007 1008 200 2010 2011 2012 201 2014 2015 2016 2017 2018* GDP At Market Prices -Consumer spending A. From Figure 9, comment in the trends and relationship between nominal GDP as income and consumer spending (2 marks) 15 |PageB. Figure 10 shows the (linear) consumption function of the UAE economy using data from 2001 to 2018. The consumption function represents the heart of the Keynesian theory of macroeconomics. The function can be represented as C = 229,665 + 0.2184 Y Figure 10: The consumption function of the UAE economy Y is current GDP (values are in 1000s AED) (https://fcsa.gov.ae/en-us) 800,000 700,000 C = 229,665 + 0.2184 Y 600,000 R2 = 0.5515 Consumtpion, C 500,000 400,000 . ............."." 300,000 200,000 100,000 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 GDP, i. Interpret AED 229,665 (2 marks) ii. Interpret 0.2184 Y (2 marks) iii. If someone's income Y is AED240,000 per year, how much total consumer spending? (2 marks) iv. If someone's income Y increases by 10% and becomes, 264,000 per year, how much the new increase in consumer spending? (2 marks)