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I. (16 Points) Heartland is a closed private economy. The consumption expenditure (C) function for this economy is C = $860 + 0.75Y and investment
I. (16 Points) Heartland is a closed private economy. The consumption expenditure (C) function for this economy is C = $860 + 0.75Y and investment expenditure (1) is fixed at $740. 1 . Present Heartland's aggregate expenditure (AE) function on a well-labeled diagram. Be sure to clearly indicate the intercept and the slope of this AE function on your diagram. 2. What is the equilibrium level of aggregate income (Y) in Heartland? $ . Give a specific numerical answer and show clearly how you found it. Demonstrate this equilibrium income (Y) on your diagram drawn in part 1 above
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