Assume in country X the average marginal propensity to save is 0.2 when the aggregate income equals
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Assume in country X the average marginal propensity to save is 0.2 when the aggregate income equals zero and consumption is 50. Derive the saving function and consumption function. What happens to consumption when the marginal propensity to save decreases to 0.1?Explain your answer and show this on a graph.
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Related Book For
Principles Of Macroeconomics
ISBN: 9781292303826
13th Global Edition
Authors: Karl E. Case,Ray C. Fair , Sharon E. Oster
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