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Table 1 shows the Consumption, Savings and Tax schedule for a series of gross income. Table 1: Consumption, Savings and Tax Gross Income (Y) Consumption
Table 1 shows the Consumption, Savings and Tax schedule for a series of gross income.
Table 1: Consumption, Savings and Tax
Gross Income (Y) | Consumption (C) | Savings (S) | Tax (T) |
0 | 100 | -100 | 0 |
500 | (a) | 142.50 | 25 |
1000 | 665 | (b) | 50 |
(c) | 1,330 | 570 | 100 |
4,000 | (d) | (e) | 200 |
a)Given that, both Consumption and Saving function are linear functions with a constant intercept and slope, find the values of (a), (b), (c), (d) and (e) in Table 1 below. You are required to show your workings.
b.)Based on Table 1, derive the Savings Function
c) Based on Table 1, derive the Consumption Function
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