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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