The table below provides a snapshot of a two-sector economy.
Income Consumption Investment
0 300 300
400 600 h
800 a 300
b 1200 i
1600 1500
c 1800 300
2400 d k
e 2400 300
3200 2700 L
3600
f 300
4000 g 300
a. Determine the marginal propensity to consume (MPC) from the schedule.
b. Giving a basis, find the missing values in the table.
c. Calculate the level of savings at each level of income and deduce the income range within which there is dissavings.
d. At what level of income is equilibrium attained?
e. Estimate the savings and consumption functions for this economy
f. Determine i. the average propensity to consume (APC) at income level 2400
ii. the average propensity to save (APS) at income level 3600.