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a) An economy's consumption schedule is given in the table below

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a) An economy's consumption schedule is given in the table below. GDP=DI 6600 6800 7000 7200 7400 7600 7800 8000 C 6680 6840 7000 7160 7320 7480 7640 7800

i. Explain the following term with example: (5 marks) a. Consumption b. Gross Domestic Product

ii. If disposable income were $7400, how much would be saved? (2 marks)

iii. What is the "break-even" level of disposable income? (2 marks) iv. What is this economy's marginal propensity to consume? (2 marks)