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##### consumption function

label Economics
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schedule 0 Hours
account_balance_wallet \$5

If the consumption function is C = \$300 billion + 0.9Y, how much do consumers spend with incomes of \$4 trillion? How much do they save?
Oct 23rd, 2017

C = \$300 billion 0.9Y

(a) When Y = \$4 trillion, C = \$[300 (0.9×4000)] billion = \$3900 billion.

Consumers spend \$3900 billion with incomes of \$4 trillion.

(b) S = Y – C = \$(4000 – 3900) billion = \$100 billion

They save \$100 billion.

Apr 11th, 2015

C = \$300 billion+ 0.9Y

(a) When Y = \$4 trillion, C = \$[300+ (0.9×4000)] billion = \$3900 billion.

Consumers spend \$3900 billion with incomes of \$4 trillion.

(b) S = Y – C = \$(4000 – 3900) billion = \$100 billion

They save \$100 billion.

Apr 11th, 2015

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Oct 23rd, 2017
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Oct 23rd, 2017
Oct 24th, 2017
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