The letters Y, C, S, and I are used to represent GDP, consumption, saving, and investment respectively. The equation representing the investment schedule for the above economy is: A)I = .3Y. B)I = 80 - .3Y. C)I = 30 + .1Y. D)I = I₀ = 30.

Question

Quizplus · Accepted Answer

The investment schedule equation is I = 30 + .1Y, where Y represents GDP. This equation shows that investment (I) increases with GDP (Y) at a rate of 0.1. Therefore, as the economy grows and GDP increases, investment will also increase.

The Letters Y, C, S, and I Are Used to Represent