Posted by **ben** on Friday, February 18, 2011 at 2:34am.

Consider the following consumption function. C = 200 + .75(DPI),

Where C is consumption, autonomous spending is 200, the MPC is .75, and DPI is disposable personal income.

Using the Graph below, graph the Consumption Function.

C

100

0 = Income

On the Graph, label the point where Savings = 0, as well as the areas of saving and dissaving.

Now, derive the point where Savings = 0 using the formulas. What is consumption when savings is zero?

What happens if autonomous spending increases to 300, so C= 300 + .75(DPI)? Show on the graph, and solve for the savings = 0 income below.

7. Consider the following Data:

MPS = .2

Autonomous spending is 100

What is the consumption function?

## Answer this Question

## Related Questions

- Macro - Real Disposable (Billions) Consumption Expenditures (Billions) Savings...
- Economics - Problem #2: A Consumption Function: C = Co + MPC(Yd). Suppose that ...
- Macro Help - Calculating Marginal Propensity to Save and Marginal Propensity to ...
- Finance - Assume personal income was $28 million last year. Personal outlays ...
- Economics - consumption function, C=5+0.75*(Y-T). Y is,national income and T is ...
- Macro Consumption Question - (Simple Spending Multiplier) For each of the ...
- Math - Suppose C(x) measures an economy's personal consumption expenditure and ...
- math - Suppose C(x) measures an economy's personal consumption expenditure and x...
- economics please help - this is a table with some questions and i don't know how...
- statistics - Hi all i have this assignment,please help me :D . . . . . 1.The ...