Using the consumption function: $C = ¯ c + b (Y)$ , calculate saving at income of Rs. 2,000 crores, If autonomous consumption is Rs. 150 crores and 40% of additional income is consumed.

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Solution

At income level Rs. 2,000 crores,
Consumption= 150 + 0.4 * 2,000
= 150+ 800
= Rs. 950 crores
Savings= Income- Consumption= 2,000- 950 = Rs. 1050 crores.

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Using the consumption function: C=¯c+b(Y), calculate saving at income of Rs. 2,000 crores, If autonomous consumption is Rs. 150 crores and 40% of additional income is consumed.

At income level Rs. 2,000 crores, Consumption= 150 + 0.4 * 2,000 = 150+ 800 = Rs. 950 croresSavings= Income- Consumption= 2,000- 950 = Rs. 1050 crores.

Using the consumption function: $C = ¯ c + b (Y)$ , calculate saving at income of Rs. 2,000 crores, If autonomous consumption is Rs. 150 crores and 40% of additional income is consumed.

At income level Rs. 2,000 crores,
Consumption= 150 + 0.4 * 2,000
= 150+ 800
= Rs. 950 crores
Savings= Income- Consumption= 2,000- 950 = Rs. 1050 crores.