The following information is available for a country: Saving Function: S-200 0.4Y Investment Function: 1- 200 The graphs of the saving and investment functions are shown as S, and I respectively 1) Using the point drawing tool, identify the original equilibrium point Label it E Now, suppose all individuals have become more thrifty. For every level of income they plan to save an additional $200. 2) Using the line drawing tool draw the new saving function and label & S 3) Using the point drawing tool identify the new equilibrium point and label it F Note Carefully follow the instructione above and only i the required objects Saving and Investment 000 500 400- 300- 200 100 -100- 296 300 400 1000 Aggregate Output/income S₁ 1500 ROC

The following information is available for a country: Saving Function: S-200 0.4Y Investment Function: 1- 200 The graphs of the saving and investment functions are shown as S, and I respectively 1) Using the point drawing tool, identify the original equilibrium point Label it E Now, suppose all individuals have become more thrifty. For every level of income they plan to save an additional $200. 2) Using the line drawing tool draw the new saving function and label & S 3) Using the point drawing tool identify the new equilibrium point and label it F Note Carefully follow the instructione above and only i the required objects Saving and Investment 000 500 400- 300- 200 100 -100- 296 300 400 1000 Aggregate Output/income S₁ 1500 ROC

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 2TY

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