Assignment #2

Ali Adnan

FA19-BBA-048

Question: Total Marks = (2.5+2.5+1=5)

Complete the following table and calculate the desired values.

GDP=DI consumption Savings APC APS MPC MPS

Rs $380 385 $-5 1.01 -0.013
390 390 0 1 0 0.75 0.25
410 405 5 0.98 0.012 0.75 0.25
430 420 10 0.97 0.023 0.75 0.25
450 435 15 0.96 0.033 0.75 0.25
470 450 20 0.95 0.042 0.75 0.25
490 465 25 0.94 0.051 0.75 0.25
510 480 30 0.941 0.058 0.75 0.25
530 495 35 0.93 0.066 0.75 0.25
550 510 40 0.92 0.072 0.75 0.25

Suppose Income( Y) is 2000

(A) Solve the following consumption equation

C= autonomous consumption +by

=385+0.75(2000)
=1885
Y-C=S
2000-1885=S
S=115

(b) Find out Savings=Y-C