Assume a consumption function of C = 90 + .75Y. The saving function for this economy is equal to
A) 90 + .25Y.
B) -90 + .75Y.
C) -90 + .25Y.
D) 90 + .75Y.

Name: Assume a consumption function of C = 90 + .75Y. The saving function for this economy is equal to A) 90 + .25Y. B) -90 + .75Y. C) -90 + .25Y. D) 90 + .75Y.
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Question

Quizplus · Accepted Answer

The saving function is the remainder of income after consumption, which can be calculated as Y - C. Therefore, Y - (90 + .75Y) simplifies to -90 + .25Y, making choice C the correct answer.

Assume a Consumption Function of C = 90