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8 November, 10:56

In an economy with no taxes and no imports, when disposable income increases from $2000 to $3000, consumption increases from $1500 to $2100. given this information, the marginal propensity to consume is

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  1. 8 November, 11:20
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    In an economy with no taxes and no imports, when disposable income increases from $2000 to $3000, consumption increases from $1500 to $2100. given this information, the marginal propensity to consume is 0.6 Disposable in come = 3000-2000=$1000. consumption = 2100-1500=$600. marginal propensity=$600/$1000=0.6
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