Question

Disposable Income Consumption
$5,000 $6,000
$7,500 $8,000
$10,000 $10,000
$12,500 $12,000

1. The marginal propensity to consume (MPC) is equal to:
a. 0.2
b. 0.25
c. 0.75
d. 0.8

2. The marginal propensity to save (MPS) is equal to:
a. 0.2
b. 0.25
c. 0.75
d. 0.8

Answer 1

f income increase by $20,000, gov't purchases are fixed at $10,000, investment spending is fixed at $5,000, net exports are fixed

 If real disposable incomeby $10,000 and real consumption spending interested by $7,500