If disposable income is $400 billion, autonomous consumption is $60 billion, and MPC is 0.8, what is the level of saving?
A)$20 billion.
B)$210 billion.
C)$380 billion.
D)$590 billion.
E)$780 billion.

Question

Quizplus · Accepted Answer

To find the level of saving, first calculate consumption using the formula: Consumption = Autonomous Consumption + MPC * Disposable Income = $60 billion + 0.8 * $400 billion = $380 billion. Then, Savings = Disposable Income - Consumption = $400 billion - $380 billion = $20 billion.

If Disposable Income Is $400 Billion, Autonomous Consumption Is $60