Question

In an economy with no taxes and no imports, disposable income increases from $1,000 to $2,000. if consumption increases from $800 to $_____, the marginal propensity to save is 0.3

Answer 1

In an economy with no taxes and no imports, disposable income increases from $1,000 to $2,000. If consumption increases from $800 to $1500, the marginal propensity to save is 0.3

Explanation : MPS + MPC = 1

MPC = 1- 0.3 = 0.7

MPC = x - 800/2000 - 1000 = x - 800/1000

x = 1500

An economy encompasses all interests related to the production, intake, alternate, and distribution of available items and services. The control of these belongings is used to meet the needs of humans, businesses, agencies, and governments in a particular region.

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