Aggregate Aggregate Planned Investment

Output Consumption

2000 1200 1350

2500 1500 1050

3000 1800 1400

3500 2100 1400

4000 2400 1400

a)Complete the table by adding three more columns inserting the Aggregate Expenditurethe Unplanned Inventory Changes, and the level of saving at each income level.

b)What is the marginal propensity to consume (MPC and the marginal propensity to save (MPS) in this economy?

c)What is the equilibrium level of income?

d)What is the value of the multiplier?

e)If the level of planned investment rises by $200m, what is the new level of equilibrium national income?