Suppose consumption in the United States is represented by the following equations:

C=200+0.5YD,whereYD=Y-TandT= 200

1 .What is the level of consumption in this economy ifYD= 0? Briefly explain how individuals "pay for" this consumption whenYD= 0.

2.Given the above parameters, calculate the level of consumption ifY= 1,200. SupposeYincreases to 1,300. What happens to the levelYDasYincreases to 1,300? What happens to the level of consumption whenYrises to 1,300? Based on this analysis, what is themarginal propensity to consumefor this economy