Hi I need help on the list of problems, I would love it if you can show the work

Question

Hi I need help on the list of problems, I would love it if you can show the work with the formulas that is used to find each question. Thanks

AT&T; 9:09 PM 2 rrcc.desire2learn.com Econ 201: Macroeconomics Spring 2016 m.Set #6-Due no later than Wednesday, 4/13/16, by the start of class Please submit either on paper, or by the D2L dropbox The Simple Keynesian Model (i.e., the income-expenditure model)--refer to chapter 11. model) - refer to chapter 11 Assume: C 1500.9DI I- 50 DI C+Iin equilibrium for a 2-sector model (Note: DI C in a 1-sector model) 1. What is the value of "autonomous" consumption (also called “a" or the vertical intercept)? a" or the vertical intercept)? 2. What is the value of the slope (also referred to as "b") of the consumption function? 3. There's another name for the slope of the consumption function. What is it? 4. What is the value of DI when the model is in equilibrium? Please show this information on a graph.

Explanation / Answer

1. Consumption function is written as:

C = a + bYd

in the above equation, a is the autonomous consumption which is positive even when person earns zero income.

b the marginal propensity to consume or the slope of consumption function

Yd is the disposabe income of the consumer after paying taxes.

So, The value of autonomous consumption i.e. a = 150

2. Value of the slope i.e. b = 0.9

3. Marginal propensity to consume is the other name of slope of consumption function

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