Answer to Question #137105 in Macroeconomics for Dane Botha

Question

In the Keynesian macroeconomic model, the equation for the savings function is given as: S = -420 + 1/4Y. Based on this information, which of the following statements is correct?

(a) The marginal propensity to consume is ¼;

(b) The level of autonomous savings is 420;

(c) At an income level of R1 000, the value of savings is 250.

(d) At an income level of R1 000, the level of savings is -170.

Answer 1

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