Answer on Macroeconomics Question for sharncy
Y = S + C
S = Y – C
For the disposable income (1000) the level of savings is:
S = y – C = y – (500+ 0.8y) = 0,2y – 500 = 0,2 * 1000 – 500 = 200 – 500 = -300.
The level of savings is -300, this means that people live in debt.
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