What will be the savings if autonomous consumption is Rs 100 and MPC = 0.6 at Rs 4000 level of income?
Answer & explanation
Correct answer: option 1
The correct answer is Option 1: 1500
S = - c̅ + (1-b)Y
S = -100 + ( 1 - 0.6) 4000
S = -100 + ( 0.4 ) 4000
S = -100 + 1600
S = 1500