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The saving function is given s= -120 0.5y .draw a diagram showing saving corresponding to income levels of 0 200 400 600 800?
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The saving function is given s= -120 0.5y .draw a diagram showing sa...
Diagram of Saving vs Income


  • Income level: 0


    • Saving = -120 + 0.5(0) = -120


  • Income level: 200


    • Saving = -120 + 0.5(200) = -20


  • Income level: 400


    • Saving = -120 + 0.5(400) = 80


  • Income level: 600


    • Saving = -120 + 0.5(600) = 280


  • Income level: 800


    • Saving = -120 + 0.5(800) = 480




Explanation


  • The saving function s= -120 + 0.5y shows that saving is a function of income.

  • The constant -120 represents the level of saving when income is zero.

  • The coefficient 0.5 shows that saving increases by 0.5 for every one unit increase in income.

  • As income increases from 0 to 800, the level of saving also increases from -120 to 480.

  • At an income level of 200, the saving is -20, which means that the individual is consuming more than their income.

  • At an income level of 400, the saving is 80, which means that the individual is saving a portion of their income.

  • At an income level of 600, the saving is 280, which means that the individual is saving a significant portion of their income.

  • At an income level of 800, the saving is 480, which means that the individual is saving a large portion of their income.

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The saving function is given s= -120 0.5y .draw a diagram showing sa...
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The saving function is given s= -120 0.5y .draw a diagram showing saving corresponding to income levels of 0 200 400 600 800?
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