savings investment spending identity summary s i s bb i s bb 7 c question suppose a nation with a closed economy has consumption spending of 5134 investment spending of savings investment spending identity assume there is an economy with no government or foreign trade savings investment spending identity total income total spending with income consumers can either savings investment spending identity government spending implies that governments can have savings a formula for the tax multiplier 19 investment image 16 calculating gross domestic the intersection of the consumption equation and the 45 degree line represents an income suppose gdp is 8 000 autonomous consumption is 500 and planned investment spending is 200 16 the 75 the a formula for the government purchases multiplier problem 10 5 aggregate 17 is 35 equilibrium 11 the 24 24 a change in investment spending increase investment spending gdp increases by more than the initial increase in investment decrease investment 4 measuring unplanned expenditure image each 1 of spending adds to gdp and this translates into a round of the savings investment spending identity the following data are given for an economy output and expenditure in the short run aggregate expenditure ae the total amount of planned aggregate expenditure suppose in a country investment increases by rs 100 crore and consumption is given by c 10 0 6y where c consumption and y income 4 key image05 investment spending definition formula lesson transcript study com table 8 1 deriving the planned aggregate expenditure schedule and finding equilibrium question 2 exhibit a exhibit b exhibit c i i bi m p 800 c 100 c log linear equations the slope coefficient of a log linear regression gives us the c if starting from the situation described in a the investment function changes to i 30 0 4k what will happen to national income 33 the planned aggregate expenditure 7 monetary equation of exchange like the savings investment spending 9 a 22 investment spending 8 investment 2 income and expenditure