Question

What is the total consumption spending Equation if the saving function is S =-4000 + 0,4Y and autonomous investment spending is 8000

Answer 1

$S =-4000 + 0.4Y\\ Y =C + S \\Y =C + (-4000 + 0.4Y) \\C = 4000 - 0.4Y + Y \\C = 4000 + 0.6Y$

$C = 4000 + 0.6 \times 8000$

$C = 8800$

$=4000 + 0.6Y$