If Zander's saving function is of the form [S = -150 + 0.5Y], his consumption equals his income at an income level of
A) 150.
B) 225.
C) 300.
D) 1,500.

Question

Quizplus · Accepted Answer

At the point where consumption equals income, savings (S) would be zero. Setting the savings function S = -150 + 0.5Y to zero and solving for Y gives us the income level where this occurs. 0 = -150 + 0.5Y leads to Y = 300.

If Zander's Saving Function Is of the Form [S =