Answer to Question #122971 in Macroeconomics for daber

Question

Assume a closed economy and no government. Also assume consumption
C=50-0.8Yd and investment I=80
derive the equation for saving

Answer 1

$S=-a+(1-b)(Y-T)$

Given ,C=50-0.8Yd. Therefore,a=50 and b= 0.8.Since there is no government intervention T=0.

S=-50+(1-0.8)(Y-0)

S=-50+0.2Y