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Write Short Note On: Saving Function - Economics

Short Note

Write Short note on:

Saving Function

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Solution

The consumer does not spend the entire increase in his income on consumption. Rather, a portion (generally fixed) of the increase in income is kept as savings. Thus, as the income increases, savings also increase. This relationship between the savings and income is depicted in a functional form by the savings function. The savings function can be expressed as:
S = f(y)

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APPEARS IN

Micheal Vaz Economics HSC 12th Standard Maharashtra State Board
Chapter 10 Determinants of Aggregates
Exercise | Q 2.2 | Page 94
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