Problem
Solving a Simple Model. Consider an economy in which C = 200 + 0.5y and I = 200.
a. Determine the equilibrium income algebraically.
b. What is the multiplier for investment spending for this economy?
c. What is the savings function? d. Draw the savings function on a graph with the investment level and indicate how equilibrium income is determined.
e. What is the level of saving at the level of equilibrium income? Show it is equal to investment.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.