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The following equations represent an economy: C = 1500 +0.85Yd I = 300 a. What is the AE function? What is the MPS? (3 marks)

The following equations represent an economy: C = 1500 +0.85Yd I = 300 a. What is the AE function? What is the MPS? (3 marks) b. What is the value of the equilibrium level of income? Determine the values of consumption, saving, and investment when the economy is in equilibrium. Is saving equal to investment at equilibrium? If not, isn't really harmful to the economy? Please explain (8 marks)

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