Question

Find the marginal propensity to save when the economy is in Equilibrium having Y = 500 and the I = 70 with the autonomous saving -30 ___

Answer 1

Heya...

Solution :-
___________

Given ____

National income ( Y ) = 500
Autonomous saving = -30
Investment (I) = 70

At equilibrium level ...

S = I

Autonomous saving + MPS (Y) = I
-30+MPS(500) = 70
500(MPS) = 70+30
500(MPS) = 100

MPS = 100/500

= 0.2 Answer ...

Thank you

Answer 2

Hello

here's your answer

_________________

National income = 500

Autonomous saving = -30

Investment = 70

S=I

Autonomous saving +MPS=I
-30+MPS (500)=70
500 (MPS)=70+30
500 (MPS)= 100
MPS=100/500
MPS=5

________________

Thanks