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QUESTION 2 The following table shows the equilibrium level of a three-sector economy. National Income Taxes...

QUESTION 2

The following table shows the equilibrium level of a three-sector economy.

National Income Taxes Disposable Income Consumption Savings Investment Government Expenditure Aggregate Expenditure

100 50
200 125
300 200
400 275
500 350
600 425
700 500
800 575

Given:

Investment = RM25 million
Government expenditure= RM100 million
Taxes = RM100 million


a) Complete the table

b) Derive the consumption function and saving function

c) Calculate the equilibrium income level

d) Sketch the equilibrium income using the aggregate expenditure-aggregate supply approach without scale.

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