MyQuestionIcon

1

You visited us 1 times! Enjoying our articles? Unlock Full Access!

Displacement in 2D Motion

The consumpti...

Question

The consumption function is given as C = 40 + 0.6Y. Derive saving function.

Open in App

Solution

Given, consumption function, $C = 40 + 0.6 Y$ .
Income = Consumption + Savings
=> Savings (S) = Income (Y) - Consumption (C)
=> $S = Y - C$
=> $S = Y - (40 + 0.6 Y)$
=> $S = Y - 40 - 0.6 Y$
=> $S = - 40 + Y (1 - 0.6)$
=> $S = - 40 + 0.4 Y$

Saving function: $S = - 40 + 0.4 Y$ ,
where,
autonomous savings $= - 40 c r o r e s$ , MPS $= 0.4$ .

Suggest Corrections

thumbs-up

0

Similar questions

Q. The consumption function of an economy is given as: C = 60 + 0.6Y. For the given consumption function, calculate the break-even level of income.

Q. The consumption function is given as C = 75 + 0.75 Y and autonomous investment is Rs. 100 crore. Derive the saving function and calculate the level of income at which saving is equal to investment.
(Saving Function: S = -75 + 0.25 Y; Level of income = Rs. 700 crore)

Given, the consumption function, C = 150 + 0.6Y, where C = consumption expenditure, Y = income and investment expenditure = Rs 2,000. Calculate:

(i) Equilibrium level of national income

(ii) Consumption at equilibrium level of national income

(iii) Saving at equilibrium level of national income

Q. The consumption curve makes an intercept of Rs. 60 crores on the Y-axis. MPC:MPS can be expressed as 1:3, then derive the saving and consumption function. Also determine the level of income, when saving becomes zero?
(Saving Function: S = -60 + 0.75 (Y); Consumption Function: C = 60 + 0.25 09; Saving will become zero at income of Rs. 80 acres)

Q. The consumption function of an economy is given as: C = 40 + 0.7 Y. Calculate the saving at the income level of Rs. 2,200 crores (Saving - 7620 acres)

View More

Join BYJU'S Learning Program

similar_icon

Related Videos

lock

Distance and Displacement

PHYSICS

Watch in App

explore_more_icon

Explore more

Displacement in 2D Motion

Standard XII Physics

Join BYJU'S Learning Program

CrossIcon