Question

Derive the savings function from the following information and show it graphically.

Also find the equilibrium level of income.

C = 40 + 0.6Yd

I = 80

G = 40

T = 40

where

C = Consumption Yd = Disposable Income

I = Investment G = Government Expenditure

T = Tax​

Answer 1

Explanation:

Also find the equilibrium level of income.

C = 40 + 0.6Yd

I = 80

G = 40

T = 40

where

C = Consumption Yd = Disposable Income

I = Investment G = Government Expenditure

T = Tax