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Monday, 23 July 2012

Economics- Calculation on Linear Equation

Given for consumption in a hypothetical  economy is C= 500 + 0.4y.  Also suppose that income (Y) is RM 600.

MPC : 0.4Y
MPS : 1-0.8 = 0.6
LEVEL OF COMSUMPTION : C = 500+ 0.4Y (600)
                                                        = 240+500
                                                        = 740
LEVEL OF SAVINGS  : S = -500 +0.6 (600)
                                           =  -140

APC : 740 / 600 = 1.23

APS-140 / 600 = 0.23

K : 1      =    1      = 1.66
   1-0.4       0.6

Y NEW : 1.66 x 600 =  RM 996

the color is to show how u can diffrentiated on each calculation.. 

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