Assessment-Economics

Note: numbers of question is 2 ,, Please provide a neat diagram to explain your answer in each question. You are required to answer each question as follows:
Give an introduction to the question and explain all key terms
Give a graft, label the axes properly and identify all the curves
Give a brief description of the changes and outcomes as indicated by the graf

Question No. 1
The consumption function may be represented in the following relationship:
C=a+b (Disposable Income)
Where C: consumption spending
a: autonomous consumption spending
b: MPC
On the graft below, draw the consumption function: C=$20+0.9 (Disposable Income).
Consumption is $billions per year.
Disposable income is $100 billion per year.
Answer the following questions:
1) At what level of income do households begin to save? Indicate the point on the graph with the letter A.
2) By how much does consumption increase when income rises $150 beyond point A? Indicate this new level of consumption with point B.

note: diagram attached in file named ( individual assignment )

Question No. 2
Defined as the natural rise and fall of a country’s economic growth over time, the business cycle is considered a useful means for analyzing an economy. In the light of the above statement: prefer the answers with graph.
a) explain the different phases of a business cycle
b) explain how both inflation and unemployment contribute to the fluctuation of the business cycle.