Hi,can someone please help me with this consumption function. I need to derive savings function from it.
C=C0+cTr+c(1-t)Y
C0-autonomous consumption
c - marginal propensity to consume
I can't work this out now, as I've got an economic maths test soon, but this might help:
The marginal propensity to consume and the marginal propensity to save(s) sum to 1, hence: s=1-c So I'd be inclined to start with that and go from there.
Also what, if any assumptions have been made? Could you also define T and t please? I presume r is the rate of interest?