The current level of real GDP

The current level of real GDP

In a simple economy (assume there are no taxes; thus, Y is disposable income), the consumption function is:

C=500+0.80Y

The current level of real GDP is $6000

At this level of real GDP, consumption will be $____ and savings will be $___ if GDP were to increase by $1000 consumption would increase by $_____ (Round your responses to the nearest dollar)

At a real GDP level of $6000, the average propensity to consume is ____ and the average propensity to save is ___. (Round your answers to two decimal to two decimal places.)


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