Use the figure below to answer the following questions.
Figure 11.5.2
-Refer to Figure 11.5.2.The equation of the saving function that corresponds to the consumption function in this figure is
A)S = - 200 + 0.8YD.
B)S = - 200 + 0.75YD.
C)S = - 200 + 0.25YD.
D)S = 200 + 0.75YD.
E)S = 200 + 0.8YD.

Question

Use the figure below to answer the following questions.
  Figure 11.5.2
-Refer to Figure 11.5.2.The equation of the saving function that corresponds to the consumption function in this figure is
A)S = - 200 + 0.8YD. 
B)S = - 200 + 0.75YD. 
C)S = - 200 + 0.25YD. 
D)S = 200 + 0.75YD. 
E)S = 200 + 0.8YD.

Quizplus · Accepted Answer

The saving function is derived from the consumption function, where the saving function is S = YD - C. Given a consumption function C = 200 + 0.75YD, the saving function becomes S = YD - (200 + 0.75YD) = -200 + 0.25YD, which corresponds to option C.

Use the Figure Below to Answer the Following Questions