Chapter 12.4, Problem 23E

### Mathematical Applications for the ...

11th Edition
Ronald J. Harshbarger + 1 other
ISBN: 9781305108042

Chapter
Section

### Mathematical Applications for the ...

11th Edition
Ronald J. Harshbarger + 1 other
ISBN: 9781305108042
Textbook Problem

# Suppose that the marginal propensity to save is d S d y = 0.15 and that consumption is $5.15 trillion when disposable income is$0. Find the national consumption function.

To determine

To calculate: The national consumption function If consumption is $5.15 trillion when disposable income is$0 trillion and if the marginal propensity to save is dSdy=0.15.

Explanation

Given Information:

The consumption is $5.15 trillion when disposable income is$0 trillion and if the marginal propensity to save is dSdy=0.15.

Formula used:

The power rule of integration is;

The integration of function f(x)=xn is given by;

xndx=xn+1n+1+c n1

Here c is any arbitrary constant.

Calculation:

Consider the marginal propensity to save is;

dSdy=0.15

And the marginal propensity to save is 1 minus the marginal propensity to consume,

dSdy=1dCdydCdy=1dSdy

And the consumption is \$5

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