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2. (a) Given Consumption Function
C= 100 + 0.75Y and autonomous investment of Rs. 300. Write Aggregate expenditure function of the economy .
(b) Write the corresponding saving function. at what level of income saving become zero?
C= 100 + 0.75Y and autonomous investment of Rs. 300. Write Aggregate expenditure function of the economy .
(b) Write the corresponding saving function. at what level of income saving become zero?
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2. (a) Given Consumption FunctionC= 100 + 0.75Y and autonomous invest...
Aggregate Expenditure Function:
- The aggregate expenditure function is the total amount of spending in an economy at a given level of income. It is calculated by adding consumption and investment expenditures.
- In this case, the consumption function is C = 100 + 0.75Y, where Y represents income. The autonomous investment is Rs. 300.
- Therefore, the aggregate expenditure function can be written as AE = C + I, where AE is the aggregate expenditure, C is consumption, and I is investment.
- Substituting the values, we get AE = (100 + 0.75Y) + 300 = 400 + 0.75Y.
Saving Function:
- Saving is the amount of income that is not spent on consumption. It is calculated by subtracting consumption from income.
- The saving function can be written as S = Y - C, where S is saving, Y is income, and C is consumption.
- Substituting the consumption function C = 100 + 0.75Y into the saving function, we get S = Y - (100 + 0.75Y) = 0.25Y - 100.
- Saving becomes zero when S = 0, so 0 = 0.25Y - 100. Solving for Y, we get Y = 400.
- At an income level of Rs. 400, saving becomes zero because all income is spent on consumption, and there is no saving.
Therefore, the aggregate expenditure function of the economy is AE = 400 + 0.75Y, and the saving function is S = 0.25Y - 100. Saving becomes zero at an income level of Rs. 400, where all income is spent on consumption.
- The aggregate expenditure function is the total amount of spending in an economy at a given level of income. It is calculated by adding consumption and investment expenditures.
- In this case, the consumption function is C = 100 + 0.75Y, where Y represents income. The autonomous investment is Rs. 300.
- Therefore, the aggregate expenditure function can be written as AE = C + I, where AE is the aggregate expenditure, C is consumption, and I is investment.
- Substituting the values, we get AE = (100 + 0.75Y) + 300 = 400 + 0.75Y.
Saving Function:
- Saving is the amount of income that is not spent on consumption. It is calculated by subtracting consumption from income.
- The saving function can be written as S = Y - C, where S is saving, Y is income, and C is consumption.
- Substituting the consumption function C = 100 + 0.75Y into the saving function, we get S = Y - (100 + 0.75Y) = 0.25Y - 100.
- Saving becomes zero when S = 0, so 0 = 0.25Y - 100. Solving for Y, we get Y = 400.
- At an income level of Rs. 400, saving becomes zero because all income is spent on consumption, and there is no saving.
Therefore, the aggregate expenditure function of the economy is AE = 400 + 0.75Y, and the saving function is S = 0.25Y - 100. Saving becomes zero at an income level of Rs. 400, where all income is spent on consumption.
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2. (a) Given Consumption FunctionC= 100 + 0.75Y and autonomous investment of Rs. 300. Write Aggregate expenditure function of the economy .(b) Write the corresponding saving function. at what level of income saving become zero?
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2. (a) Given Consumption FunctionC= 100 + 0.75Y and autonomous investment of Rs. 300. Write Aggregate expenditure function of the economy .(b) Write the corresponding saving function. at what level of income saving become zero? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about 2. (a) Given Consumption FunctionC= 100 + 0.75Y and autonomous investment of Rs. 300. Write Aggregate expenditure function of the economy .(b) Write the corresponding saving function. at what level of income saving become zero? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 2. (a) Given Consumption FunctionC= 100 + 0.75Y and autonomous investment of Rs. 300. Write Aggregate expenditure function of the economy .(b) Write the corresponding saving function. at what level of income saving become zero?.
2. (a) Given Consumption FunctionC= 100 + 0.75Y and autonomous investment of Rs. 300. Write Aggregate expenditure function of the economy .(b) Write the corresponding saving function. at what level of income saving become zero? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about 2. (a) Given Consumption FunctionC= 100 + 0.75Y and autonomous investment of Rs. 300. Write Aggregate expenditure function of the economy .(b) Write the corresponding saving function. at what level of income saving become zero? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 2. (a) Given Consumption FunctionC= 100 + 0.75Y and autonomous investment of Rs. 300. Write Aggregate expenditure function of the economy .(b) Write the corresponding saving function. at what level of income saving become zero?.
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