Derive an equation for the saving function and calculate savings at equilibrium

Posted on 2014-03-21 09:55:00 in Economics by JOANA

In an economy:

consumption C = 50 + 0.80Y

Investment  I = 70

(i)         find the equilibrium level of income and consumption at equilibrium.

(ii)        Derive an equation for the saving function and calculate savings at equilibrium.

(iii)      Find equilibrium level of income by equating planned saving and planned investment.

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