Q1 )

In a closed economy, the national savings functions for country M is S = - 150 + 0.35Y and investment I = RM 275 million

i)Compute the Marginal Propensity Consumption (MPC).

ii)Derive the consumption function.

iii)Complete the schedule below. Copy the table inside the answer booklet.

National income (Y) Savings (S) Consumption (C) Investment (1) (RM million) (RM million) (RM million) (RM million) O 250 500 750 1,000 1,250 1,500 1,750 2,000