Keynesian Cross ROUND ALL CALCULATIONS TO TWO (2) DECIMAL PLACES
a. Please draw the Keynesian Cross assuming the following information. Be sure to specify at what point consumption and disposable income are equal. Marginal Propensity to Consume = .67 Autonomous Consumption = $850
b. Assume that your disposable income is $1250. How much are you consuming? Are you saving or dissaving?
c. Assume that autonomous consumption decreases to $256. Please illustrate this change on graph from part a. Again, you must specify at what point consumption and disposable income are equal.
d. Based on the change in part c, illustrate what will happen to aggregate demand.