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How will firms react when they discover that their actual investment is less than their in

How will firms react when they discover that their actual investment is less than their intended
              investment? How will their reaction affect equilibrium national income?

2.              Consider an economy where national income is $7,000, autonomous consumption is $1,000 and the MPC =                             0.80. Explain what will happen to national income in the following three cases:

Case A: intended investment = $200

Case B: intended investment = $400

Case C: intended investment = $600

3.              Consider an economy where Y = $3,500, C = $500 + (0.80Y), and where autonomous investment is equal
              to $200.

a.Is this economy in equilibrium? Explain.

b.What will happen if people try to increase their saving to $400?

Dec 11 2019 View more View Less

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