Suppose that we are in an economy with trade, the government, domestic consumption, and investment. The government currently begins collecting no taxes (a tax rate of 0%). Suppose that this economy begins with a National Income: Y = $7,000. At this level of income, the desired quantities of Consumption (C), Government Spending (G), Investment (I), Exports (X) and Imports (Im) are the following: = 6,000 = 2,000 = 2,000 = 1,000 = 2,000 Now suppose that National Income decreases to Y = $5,000, and we observe the following: = 4,400 = 2,000 = 2,000 = 1,000 = 1,800

Plot the functions for C, I, G, and NX, as well as the AEF, with National Income (Y) on the x-axis. Label the value for the y-intercepts of each function and include the 45o line also. [2 points]