Question

derive the straight line saving curve using the equation c=20+0.6y
taking the income level of Rs. 100,Rs.200, Rs.300 crores
Also calculated that level of income where consumption is equals to income​

Answer 1

Answer:

Income(Y)

Consumption (C)

Savings (S)

100

80

20

200

140

60

300

200

100

When, Income= Consumption

=> Y= C

=> Y= 20 + 0.6 Y

=> Y- 0.6 Y= 20

=> 0.4 Y= 20

=> Y = 200/ 0.4=50.

Hence when Income is Rs. 50, then consumption is equal to income.

solution

Answer By

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Toppr

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