(Solution Document) Consumption function and non-income determinants The following graphs show an ec


Hello,

I was having a hard time figuring out these two questions. Can you please help me, I'd really appreciate it. 

Thank you! 



1. The following graphs show an economy's initial position at point B along its consumption function   . Suppose there is a stock market crash that wipes out a third of households' net wealth. 
On the graph, shift either the CF curve or the initial point on the CF curve to show the impact of a decline in households' net wealth.

 







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