if the marginal propensity to consume is 0.5 and disposable income decreases by $10,000, by how much will consumption spending decrease? $10,000 $500 $50 $5,000 $9,524

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17-12-2022
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if the marginal propensity to consume is 0.5 and disposable income decreases by $10,000, by how much will consumption spending decrease? $10,000 $500 $50 $5,000 $9,524

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Tutorconsortium425 Tutorconsortium425 · Answer 1 · 2023-01-02T15:29:11+01:00

If the marginal propensity to consume is 0.5 and disposable income increases by $10,000, consumption spending will increase.

How do you calculate a person's marginal propensity to save in regards to their available funds?

MPS is most frequently used in Keynesian economics. It is simply computed by dividing the observed change in savings by the identified change in income: MPS = ΔS/ΔY. The following formula is employed to calculate consumption: autonomy + marginal inclination to consume - funds available. This economic model implies that people are spending and saving more money. A measure of how much more people will spend for every dollar they earn more is called the marginal propensity to consume (MPC). Here is an MPC equation.

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