Question
If the consumption function is C = $200 billion + 0.6Y,
(a) How much do consumers spend with incomes of $8.25 trillion?
I got 5.2 trillion for this.
(b) How much do they save?
??
(a) How much do consumers spend with incomes of $8.25 trillion?
I got 5.2 trillion for this.
(b) How much do they save?
??
Answers
Steve
assuming y is in billions,
c(y) = 200 + .6y
c(8250) = 200 + .6(8250) = 5150
or, 5.2 trillion
looks ok to me.
(b) subtract their spending from their income.
c(y) = 200 + .6y
c(8250) = 200 + .6(8250) = 5150
or, 5.2 trillion
looks ok to me.
(b) subtract their spending from their income.