Given that C = $500 + 0.8Y_D,if the level of disposable income is $1,000,the level of saving is A)$300. B)-$300. C)$500. D)-$1,300.

Question

Quizplus · Accepted Answer

Using the provided formula, we plug in the given level of disposable income: C = $500 + 0.8($1,000)_D C = $500 + $800_D To determine the level of saving, we need to subtract the level of consumption (C) from disposable income (Y). Y = $1,000 _D = Y - C _D = $1,000 - ($500 + $800_D) Simplifying: _D = $1,000 - $500 - $800_D _D = $500 - $800_D Moving the variable term to the left side: $800_D + _D = $500 Factoring out the variable: _D($800 + 1) = $500 _D = -$300 Therefore, the level of saving is -$300.

Given That C = $500 + 0