What is equilibrium level of income-value of the multiplier

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Consider the following simple economy with no government or foreign sector: Consumption: C=200+0.8Y Investment: I=100

a) What is the equation for aggregate demand (AD) for this economy?

b) What is the equilibrium level of income?

c) What is the value of the multiplier?

d) What is the level of savings in equilibrium?

e) If I rises to 150 what is the change in the equilibrium level of income?

Reference no: EM13695064

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