Question
(b) The consumption function and savings function in an economy is given by: C= 200+0.6Y S= 100+0.2Y Where C, S and Y represent consumption,
(b) The consumption function and savings function in an economy is given by: C= 200+0.6Y S= 100+0.2Y Where C, S and Y represent consumption, savings and national income, respectively. Determine the: (i) equilibrium level of national income; (ii) multiplier; (iii) change in national income, if savings increases by 20%. (10 marks)
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Econometric Analysis
Authors: William H. Greene
5th Edition
130661899, 978-0130661890
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