Find the consumption function, saving function. Calculate the marginal propensity to saving (MPS) when Y =100. Do you agree that the sum o MPS and MPC equal to one? Explain your answer.

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter9: Aggregate Expenditures
Section: Chapter Questions
Problem 15E
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Question-5
If the marginal propensity to consume is given by
1
MPC =
3
+
1
2√y
Initial condition, C = 19/3 when Y = 4
Find the consumption function, saving function.
Calculate the marginal propensity to saving (MPS) when Y =100. Do you agree that the sum of
MPS and MPC equal to one? Explain your answer.
Transcribed Image Text:Question-5 If the marginal propensity to consume is given by 1 MPC = 3 + 1 2√y Initial condition, C = 19/3 when Y = 4 Find the consumption function, saving function. Calculate the marginal propensity to saving (MPS) when Y =100. Do you agree that the sum of MPS and MPC equal to one? Explain your answer.
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