Question: A consumption function is given by C = aY + b. It is known that when Y = 10, the value of C is 28,

A consumption function is given by C = aY + b.
It is known that when Y = 10, the value of C is 28, and that when Y = 30, the value of C is 44.
By solving a pair of simultaneous equations, find the values of a and b, and deduce that the corresponding savings function is given by S = 0.2Y − 20
Determine the equilibrium level of income when planned investment I = 13.

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