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2. A hypothetical closed economy without government participation has a consumption function described by: C = 2000 + 0.75Y where C = Consumption Y =

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2. A hypothetical closed economy without government participation has a consumption function described by: C = 2000 + 0.75Y where C = Consumption Y = National Income Required: (i) Obtain the level of break-even income in relation to consumption. (2 marks) (ii) Obtain equilibrium level of national income given that investment is exogenously determined at 2500 units. (2 marks) (iii) Obtain savings function (the equation relating savings to national income) (2 marks)

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