Class 12 Exam  >  Class 12 Questions  >  Find saving, when 5=(-) 100, Y = 500 and marg... Start Learning for Free
Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save = 0.4.?
Most Upvoted Answer
Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save =...
Saving Calculation:
To calculate saving, we need to use the formula:

Saving = Disposable Income - Consumption

Disposable Income:
Given that 5 = (-)100, we can deduce that the disposable income is 5.

Consumption:
To calculate consumption, we need to use the formula:

Consumption = Disposable Income - Saving

Let's substitute the values that we have:

Consumption = 5 - Saving

Marginal Propensity to Save:
The marginal propensity to save (MPS) is the proportion of additional income that is saved rather than consumed. It represents the change in saving with respect to a change in income.

Given that the marginal propensity to save (MPS) is 0.4, this means that for every additional unit of income, 40% of it is saved.

Calculating Saving:
To calculate saving, we can rearrange the consumption formula:

Saving = Disposable Income - Consumption

Since Consumption = Disposable Income - Saving, we can substitute it in the above equation:

Saving = Disposable Income - (Disposable Income - Saving)

Simplifying the equation:

Saving = Disposable Income - Disposable Income + Saving

Combining like terms:

2 * Saving = Disposable Income

Dividing both sides by 2:

Saving = Disposable Income / 2

Substituting the value of disposable income:

Saving = 5 / 2

Calculating the value:

Saving = 2.5

Conclusion:
The saving is 2.5 when disposable income is 5 and the marginal propensity to save is 0.4.
Explore Courses for Class 12 exam
Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save = 0.4.?
Question Description
Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save = 0.4.? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save = 0.4.? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save = 0.4.?.
Solutions for Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save = 0.4.? in English & in Hindi are available as part of our courses for Class 12. Download more important topics, notes, lectures and mock test series for Class 12 Exam by signing up for free.
Here you can find the meaning of Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save = 0.4.? defined & explained in the simplest way possible. Besides giving the explanation of Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save = 0.4.?, a detailed solution for Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save = 0.4.? has been provided alongside types of Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save = 0.4.? theory, EduRev gives you an ample number of questions to practice Find saving, when 5=(-) 100, Y = 500 and marginal propensity to save = 0.4.? tests, examples and also practice Class 12 tests.
Explore Courses for Class 12 exam
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev