Question : Using the consumption function, Calculate saving at income level of 2500 crore, if autonomous consumption is 200 crore and 60% of additional income is consumed.
Option 1: 1000
Option 2: 600
Option 3: 800
Option 4: 200
Correct Answer: 800
Solution : MPC= 0.6
MPS=0.4
S= -200+0.4(2500)
S= 800
Hence, Option C is correct.
Question : Using the consumption function, Calculate consumption at income level of 2500 crore, if autonomous consumption is 100 crore and 40% of additional income is consumed.
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