If the aggregate consumption function is C = 20 + 0.75 Y,the aggregate saving function will be
A)S = 20 - 0.75 Y.
B)S = 20 + 0.75 Y.
C)S = -20 + 0.75 Y.
D)S = -20 + 0.25 Y.

Question

Quizplus · Accepted Answer

The aggregate saving function is derived from the identity Y = C + S, where Y is income, C is consumption, and S is saving. Given C = 20 + 0.75Y, we have S = Y - C = Y - (20 + 0.75Y) = -20 + 0.25Y.

If the Aggregate Consumption Function Is C = 20