If the autonomous consumption is given as 100 and the tendency of the people to increase consumption for an increase in income is only 20%, then derive the savings function.
If the autonomous consumption is given as 100 and the tendency of the people to increase consumption for an increase in income is only 20%, then derive the savings function.
Solution
✅ Correct Option: 1
MPC = 0.2, so MPS = 1 minus 0.2 = 0.8. Consumption function is . Saving function is .
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