1 / 2

Consumption and Savings Function

Y = C atau BEP. Consumption and Savings Function. Income = spending. C = a + bY. Consumer spending and saving. S = -a + (1-b)Y. According to the Keynesian consumption function, savings are positively related to the level of disposable income.

emilie
Download Presentation

Consumption and Savings Function

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Y = C atau BEP Consumption and Savings Function Income = spending C = a + bY Consumer spending and saving S = -a + (1-b)Y According to the Keynesian consumption function, savings are positively related to the level of disposable income. At low levels of income, total spending may exceed income causing dis-saving. As income rises, total savings rise - the gradient of the savings function is given by the marginal propensity to save Disposible Inccome (Y)

  2. 150 C = 30 + 0,75Y 120 Y = C or BEP Consumption and Savings Function Income = spending Consumer spending and saving autonomous consumption  30 S = -30 + (1 - 0,75)Y WhilstNational Income Rp 120 billion, Total consumption Rp 120 billion Whilst National Income rise go Rp 160 billion, Total consumption Rp 150 billion Change of Y : Change of C : MPC C function S function Y1 = 120 C1 = 120 MPC = 30/40 C = 30 + 0,75YS = -30 + (1-0,75)Y Y2 = 160 C2 = 150 MPC = 0,75 Y = 40 C = 30 (a) 0 120 160 Disposible Inccome (Y) -30

More Related