The Giladi family has a linear consumption function with a marginal propensity to consume (MPC) of...

The Giladi family has a linear consumption function with a marginal propensity to consume (MPC) of 0.6, and the Sharoni family has a linear savings function with a marginal propensity to save (MPS) of 0.6. Autonomous consumption (Co) is positive, Thus:

a. There is a level of income at which the Giladi family’s consumption equals savings.

b. There is a level of income at which the Sharon family’s consumption equals savings.

c. It is impossible to determine if in the Sharoni family’s consumption function there is a level of income at which the consumption equals savings.

d. It is impossible to determine if in the Giladi family’s consumption function there a level of income at which the consumption equals savings.

e. All of the other answers are not correct.

Expert Solution

Rahul Sunny answered 2 years ago

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