The consumption function has the form: C = 100 + 0.8 Y.

The consumption function has the form: C = 100 + 0.8 Y.

a) calculate consumer spending (consumption) and savings at these income values:

Income

Consumption

Saving

600

800

1000

1200

1400

b) build a consumption schedule;

c) calculate the marginal propensity to consume and the marginal propensity to save;

d) calculate the expense multiplier.

Decision: