Calculate and explain what is happening in the economy

Reference no: EM13235302

Household spending is given by the following equation: C = $100 + 0.70Yd and Intended Investment = $125.

(a) Calculate the equilibrium level of income in the economy, and explain why this is the case.

(b) If the current level of income is $500 calculate and explain what is happening in the economy?

Reference no: EM13235302

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