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Effects of an Autonomous Change on Equilibrium Demand in the Product Market

The saving fu...

Question

The saving function is given as: S = -120 + 0.5 Y. Draw a diagram showing saving corresponding to income levels of 0, 200, 400, 600 and 800.

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Solution

Income (Y)

Savings (S) = -120 + 0.5 Y

0

-120

200

-20

400

80

600

180

800

280

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Effects of an Autonomous Change on Equilibrium Demand in the Product Market

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