The consumption curve makes an intercept of ₹ 60 crores on the Y-axi – InterviewSolution

InterviewSolution

1.	The consumption curve makes an intercept of ₹ 60 crores on the Y-axis. If MPC:MPS can be expressed as 1:3, then derive the saving and consumption function. Also determine the level of income, when saving becomes zero ?
Answer» Saving Function: S= -60+0.75 (Y), Consumption Function: C= 60+0.25(Y), Saving will become

Discussion

No Comment Found

Related InterviewSolutions

Calculate APC and APS from the following schedule : `{:(,"Income" (Y),,100,,200,,300),(,"Consumption" (C),,80,,120,,180):}`
At zero level of income, consuption isA. zeroB. positiveC. negativeD. all of these
If APC of an economy is 0.8, what should be the savings when an income level is 4000 crore?
Find savings of autonomous consumption is 60 and MPC=0.5 at 5000 level of income
Find consumption (C ) if b=0.8 and income (Y) is 200 and `bar(C )` =100
MPC is the slope ofA. saving functionB. consumption functionC. cost functionD. all of these
Complete the following table:
Using the equation of consumption function: C = `barc` + b(Y), calculate consumption expenditure at the income level of ₹ 500 crores, if autonomous consumption is ₹ 40 crores and 40% of additional income is saved.
(i) The disposable income (Y) is ₹ 1200 crores and consumption expenditure ( C) is ₹ 800 crores. Calculate the APC. If saving is ₹ 500, out of an income of ₹ 5,000, how much is the APS ? (iii) If disposable income is ₹ 1,000 and consumption expenditure is ₹ 750, find out average propensity to save. (iv) If income is ₹ 100, calculate APC. (v) When incomes rises from ₹ 1,000 to ₹ 1,100, saving rise by ₹ 30. Find out MPS and MPC.
Complete the following table :