Time remaining:
consumption function

Economics
Tutor: None Selected Time limit: 0 Hours

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?
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

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

Studypool's Notebank makes it easy to buy and sell old notes, study guides, reviews, etc.
Click to visit
The Notebank
...
Apr 11th, 2015
...
Apr 11th, 2015
Dec 9th, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer