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Level of Output and Income Consumption Saving APC APS MPC MPS 480 484 -4 1.0167 0.0167 0.8 0.2 520 520 0 1.0000 0.0000 0.8 0.2

Level of Output and Income Consumption Saving APC APS MPC MPS
480 484 -4 1.0167 0.0167 0.8 0.2
520 520 0 1.0000 0.0000 0.8 0.2
560 556 4 0.9857 0.0143 0.8 0.2
600 592 8 0.9733 0.0267 0.8 0.2
640 628 12 0.9625 0.0375 0.8 0.2
680 664 16 0.9529 0.0471 0.8 0.2
720 700 20 0.9444 0.0556 0.8 0.2
760 736 24 0.9368 0.0632 0.8 0.2
800 772 28 0.9300 0.0700 0.8 0.2

Suppose the wealth effect is such that a $10 change in wealth produces a $2 change in consumption at each level of income. Assume real estate prices tumble such that wealth declines by $160. Instructions: Enter your answers as whole numbers. a. What will be the new level of consumption at the $680 billion level of disposable income? $ . b. What will be the new level of saving? $

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