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    Aggregate Consumption Function

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    The document presents a consumption function and saving function for an economy. It shows that consumption (C) equals 300 plus 0.6 multiplied by income (Y), and that saving (S) equals negative 300 plus 0.4 multiplied by income. It provides an example where total income is $100 million, so consumption is $60.3 million and saving is $39.7 million. The marginal propensity to consume is 0.6 and the marginal propensity to save is 0.4.

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    Aggregate Consumption Function

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    Palos Dose
    14 views4 pages
    The document presents a consumption function and saving function for an economy. It shows that consumption (C) equals 300 plus 0.6 multiplied by income (Y), and that saving (S) equals negative 300 plus 0.4 multiplied by income. It provides an example where total income is $100 million, so consumption is $60.3 million and saving is $39.7 million. The marginal propensity to consume is 0.6 and the marginal propensity to save is 0.4.

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    Miranda_Assessment

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    The document presents a consumption function and saving function for an economy. It shows that consumption (C) equals 300 plus 0.6 multiplied by income (Y), and that saving (S) equals negative 300 plus 0.4 multiplied by income. It provides an example where total income is $100 million, so consumption is $60.3 million and saving is $39.7 million. The marginal propensity to consume is 0.6 and the marginal propensity to save is 0.4.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    14 views4 pages

    Aggregate Consumption Function

    Uploaded by

    Palos Dose
    The document presents a consumption function and saving function for an economy. It shows that consumption (C) equals 300 plus 0.6 multiplied by income (Y), and that saving (S) equals negative 300 plus 0.4 multiplied by income. It provides an example where total income is $100 million, so consumption is $60.3 million and saving is $39.7 million. The marginal propensity to consume is 0.6 and the marginal propensity to save is 0.4.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
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    (a)

    Consumption function C = 300 + 0.6Y

    Income (Y) Consumption(C) Saving


    0 300 -300
    Aggregate Consumption
    100 360 -260 700
    200 420 -220 600
    300 480 -180
    500
    400 540 -140
    500 600 -100 400

    300

    200

    100

    0
    0 100 200 300 400 500

    (b) The autonomous consumption for outland is 300

    (c) Marginal Propensity to Consume 0.6


    Marginal Propensity to Save 0.4

    (d) Y = 100,000,000
    C = 300 + 0.6Y
    Y 100,000,000
    Consumption 60,000,300
    Fixed (300)
    Increase 60,000,000

    (e) Saving function S = -300+0.4Y


    Saving
    Income (Y) Consumption(C) Saving (S) 150
    0 300 -300 100
    100 360 -260 50
    200 420 -220 0
    300 480 -180 0 100 200 300 400 500 600
    -50
    400 540 -140
    -100
    -150
    -200
    -250
    50
    0
    0 100 200 300 400 500 600
    -50
    -100
    500 600 -100
    -150
    600 660 -60
    700 720 -20 -200

    800 780 20 -250


    900 840 60 -300
    1000 900 100 -350
    egate Consumption Function

    300 400 500

    Saving

    0 400 500 600 700 800 900 1000


    0 400 500 600 700 800 900 1000

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