Exam Two Exam Two Intro. Here we are focusing on the Keynesian perspective.
Consumer spending depends upon income.
So, C starts at 600 and increases by 750 when income increases to 1000 for a total of 1350 in autonomous and induced consumption spending. The green line is the 45 degree line of unity. The Equilibrium Level of Income 1. I when the economy is in equilibrium. That is, the unspent income is just offset by businesses investment in new plant and equipment.