Please don\'t forget to show me how you calculate the numbers inside the chart.

Question

Please don't forget to show me how you calculate the numbers inside the chart.

1. Complete the following table assuming that marginal propensity to save for this economy is 0.2 Disposable ConsumptionSaving income 100 200 300 400 140 a) The slope ol the save schedule is b) The slope of the consumption schedule is c) The breakeven level of income is: o Average propensiy to save at the disposable income of $300as e) Average propensity to save at the disposable income of $200 is: f) Average propensity to consumption at the disposable income of $400 is

Explanation / Answer

Disposable income Consumption Saving 100 140 -40 200 220 -20 300 300 0 400 380 20 MPC = (1-MPS) =1-0.2 =0.8 We know consumption is given by C = Co + c*Yd We know 140 = Co +0.8*100 Co = 60 Savings = Yd-C Savings = C = -Co + (1-c)*Yd a) Slope of saving schedule = (-20+40)/(200-100) = 20/100 =0.2 b) Slope of consumption schedule = (220-140)/(200-100) = 80/100 = 0.8 c) Break-even level of income is where savings are zero. So Y=300 is break even. d) APS = S/Y. APS at Y = 300 is 0/300 = 0. *WE are supposed to do only four sub-parts. For solution to other parts please post as a different question.

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