Determine the equation for aggregate expenditure function

Reference no: EM1369550

Assume you were given the following data for an economy without government spending, exports, or income. C is desired consumption, I is desired investment, and Y is income. C and I are given by:
C = 1400 + 0.8Y
I = 400

a) What is the equation for the aggregate expenditure (AE) function?
b) Applying the equilibrium condition that Y = AE, determine the level of equilibrium national income.

Reference no: EM1369550

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