Suppose the consumption schedule is: C = 20 + .9Y,where C is consumption and Y is disposable income.
-Refer to the above data.At an $800 level of disposable income,the level of saving is:
A) $180
B) $740
C) $60
D) $18

Question

Quizplus · Accepted Answer

At a disposable income level of $800, consumption would be:
C = 20 + .9Y
C = 20 + .9(800)
C = 20 + 720
C = 740
Therefore, saving would be:
S = Y - C
S = 800 - 740
S = 60
So the correct answer is C, $60.

Suppose the Consumption Schedule Is: C = 20