Suppose that disposable income, consumption, and saving in some country are $800 billion, $700 billion, and $100 billion, respectively. next, assume that disposable income increases by $80 billion, consumption rises by $56 billion, and saving goes up by $24 billion.

a. what is the economy's mpc?

Question

Guest

Business

29 March, 16:49

Suppose that disposable income, consumption, and saving in some country are $800 billion, $700 billion, and $100 billion, respectively. next, assume that disposable income increases by $80 billion, consumption rises by $56 billion, and saving goes up by $24 billion.

a. what is the economy's mpc?

+1

Answers (1)

Know the Answer?

Leah Montgomery · Answer 1

The mpc is the marginal propensity to consume and is the ratio of the increase of spent money over increase in income so in this case the consumption rises by $56 billion and the disposable income by $80 billion so the mpc would be 56/80=0.7.

Suppose that disposable income, consumption, and saving in some country are $800 billion, $700 billion, and $100 billion, respectively. next, assume that disposable income increases by $80 billion, consumption rises by $56 billion, and saving goes up by $24 billion.a. what is the economy's mpc?

Suppose that disposable income, consumption, and saving in some country are $800 billion, $700 billion, and $100 billion, respectively. next, assume that disposable income increases by $80 billion, consumption rises by $56 billion, and saving goes up by $24 billion.

a. what is the economy's mpc?