Consumption And Saving Function

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Macroeconomics 201

Quiz

Topic: APC, APS, MPC, MPC AND Consumption and Saving Function

1. Calculate consumption if income is $1500, MPC is 0.75 and autonomous consumption is

$350. 5pts

C= a+bY

C= 350+0.75(1500)

C= 350+1125

C= 1475

2. Calculate saving if income is $2200, MPS is 0.25 and autonomous dissaving is $575. 5pts

S= -a+sY

S= –575+0.25(2200)

S= -575+550

S= –25

3. Calculate consumption if income is $2050, MPC is 0.84 and autonomous consumption is

$395. 5pts