Question

derivation of saving curve from consumption curve
​

Answer 1

Answer:

Given Consumption Curve CC' the steps in derivation of Saving Curve are:

(i) Take OS equal to OC.

(ii) Draw a 45o line on OX-axis from point O intersecting CC' at point B.

(iii) Draw a perpendicular from B to intersect X-axis at B'.

(iv) Joint S and B' and extend it to derive Saving Curve SS'