If the Saving Function Is of the Form [S =

question 166

Multiple Choice

If the saving function is of the form [S = -15 + 0.4Y], consumption at an income level of 200 is

• A) 80.
• B) 105.
• C) 135.
• D) 185.

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Definitions:

Salvage Value

The estimated resale value of an asset at the end of its useful life, often considered during depreciation calculations.

Double-Declining Balance

A method of accelerated depreciation where an asset’s book value is decreased at double the rate of its straight-line depreciation.

Straight-Line

A method of calculating depreciation or amortization by dividing the cost of an asset equally over its useful life.

Double-Declining Balance

A method of accelerated depreciation that doubles the normal depreciation rate, reducing the value of an asset more quickly in its early years.