# the equation for the aggregate expenditure (AE) function

Suppose you were given the following information for an economy without government spending, exports, or income. C is desired consumption, I is desired investment, and Y is income. C and I are given by:

C = 1400 + 0.8Y

I = 400

a) What is the equation for the aggregate expenditure (AE) function?

b) Applying the equilibrium condition that Y = AE, determine the level of equilibrium national income.

https://brainmass.com/economics/general-equilibrium/equation-aggregate-expenditure-function-317972

#### Solution Summary

The equation for the aggregate expenditure (AE) function is presented. The expert applies the equilibrium condition to determine the level of equilibrium national income.

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