Year disposable income consumer spending

( millions of dollars) ( millions of dollars)

2009 $100 $180

2010 350 380

2011 300 340

2012 400 420

2013 375 400

2014 500 500

1. From 2009 to 2014, Eastlandia experienced

large fluctuations in both aggregate consumer

spending and disposable income, but wealth, the

interest rate, and expected future disposable

income did not change. The accompanying table

shows the level of aggregate consumer spending

and disposable income in millions of dollars for

each of these years. Use this information to

answer the following questions.

a) What is the marginal propensity to

consume? What is the marginal propensity to save?

b) What is the aggregate consumption function?

c) Plot the aggregate consumption function for Eastlandia.

d) Find the aggregate savings function and plot it