Excel Spreadsheet Q in class

An the excel spreadsheet was given , in which a level of income was given, and from this income some is saved . This is the withdrawal row. In a closed economy, injections always equal withdrawals. There also was a randomly allocated investment. It was required that we balanced the system, so we set the withdrawal level to make the level of income equal to the level of aggregate expenditure, which is just a sum of the other rows. To do this we had to work out the marginal propensity to consume, this is calculated by dividing the change in consumption by the change in income and if it was say, 0.8, then you'd set 30% of your income towards withdrawals to get the system close to equilibrium. Aggregate expenditure is the sum of income, consumption and injections, less withdrawals. To balance the system, one adjusts the withdrawals figure until income equals aggregate expenditure.