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Graphing Exercises
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  1. Draw a Keynesian cross diagram such as that in Figure 4 of Chapter 24. Label the expenditure function E1, and label the equilibrium level of income Y1.
    Graph the following curves by clicking here
    1. What is the slope of the expenditure function?
    2. Suppose an exogenous increase in import demand occurs. Draw the new expenditure function, labeling it E2.
    3. What will be the new level of income? Label it Y2. By how much will income increase or decrease?

  2. Draw a Keynesian cross diagram such as that in Figure 4 of Chapter 24. Label the expenditure function E1, and label the equilibrium level of income Y1.
    Graph the following curves by clicking here
    1. What is the slope of the expenditure function?
    2. Suppose an exogenous increase in exports occurs. Draw the new expenditure function, labeling it E2.
    3. What will be the new level of income? Label it Y2.

  3. In this exercise, you will be drawing an import function such as that in Figure 3 of Chapter 24. First, create a graph and label the vertical axis imports (M) and the horizontal axis Income (Y).
    Graph the following curves by clicking here
    1. If the import function is M = 200 + 0.08Y, what is the numerical value of the vertical intercept? Label this as point A on your graph. Explain what this number means.
    2. Suppose income were 2,000. What would be the value of imports? Label this as point B on your graph.
    3. Connect points A and B, and label this line Import Function (MF).
    4. What is the slope of this import function? Explain what this number means.





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