At the equilibrium point when $C=100+0.5 Y$ and $I= 200$, saving will be ........ |
600 400 200 100 |
200 |
The correct answer is Option (3) → 200 Given: Consumption function: C=100+0.5Y , Investment (I): 200 At equilibrium, Y=C+I Step 1: Find Equilibrium Income (Y) Substitute the consumption function into the equilibrium condition: Y = 100+0.5Y + 200 Y - 0.5 Y = 300 Y = 300/0.5 = 600 Step 2: Find Consumption (C) C= 100 + 0.5 * 600 = 400 Step 3: Find Saving (S) S = Y - C = 600 - 400 = 200 |