Answer to Question #97625 in Macroeconomics for Amrit

Question

Complete the following data, which depicts a hypothetical economy in which the marginal propensity to consume is constant at all levels of real GDP and investment spending is autonomous. Equilibrium real GDP is equal to$8000. There is no government or foreign trade.
Real GDP $2000,Cosumption $2000?
How much is saving and investment ?

Answer 1

Real GDP= $2000

Consumption= $2000

$GDP=C+I$

$2000=2000+I$

$I=0$

$S=I$

$\therefore$ Saving and Investment $=0$