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Part II. Application Questions (20 marks) 1a) Suppose that the consumption function is, C=30+0.2Y what does the slope and intercept of the line tell us
Part II. Application Questions (20 marks) 1a) Suppose that the consumption function is, C=30+0.2Y what does the slope and intercept of the line tell us about the relationship between consumption and national income? ( 5 marks) 1b) Consider the following information Suppose that govemment expenditure increases from BD 400 to BD 440 billion, calculate the government budget multiplier and change in aggregate level of output
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