2. Public consumption of a country (two sectors) is indicated by the function C = 60 + 0.4Y. Calculate: a. Find the saving function. b. If the investment that occurs is 300, determine the balance national income. c. What is the consumption of the people of the country if the national income is 400.

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Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.