Question

Explain the steps taken in derivation of saving curve from consumption curve. Use diagram.​

Answer 1

Answer:Steps taken for derivation of consumption curve are: (i) At zero level of income, the savings are O\overline{S} which is the amount of autonomous consumption at Y= 0. So, -O\overline{S} = O\overline{C}. Hence, the consumption will start from the point \overline{C}

Explanation:

Answer 2

Steps taken in derivation of saving curve from consumption curve.

Explanation:

The steps are:

• Taking OS equal to OC.
• Draw a 45 degree line on OX axis from the point O  which intersect CC' at the point B.
• A perpendicular is drawn from  point B to Intersect X-axis B'
• Joint S and B' and extend  to derive Curve SS'.