Question 1 and 2

Dear student
1. Consumption function, C= 400 +bY
At equilibrium, AS = AD
Y = C+I
2000 =  400 +b(2000) + 200
2000 = 600 +2000b
1400 /2000 = b 
0.7 = b = MPC

2. MPC = 1-MPS
    MPC= 1- 0.3 = 0.7
Consumption function , C = 100 + bY
At equilibrium, AS=AD
Y= C+I
800 = 100 + (0.7 x 800) + I
800 = 100 + 560 +I
800 - 660 = I
140 =I = Investment expenditure

Regards 

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