Between 2008 and 2009, real disposable income (in 2009 dollars) declined slightly (by $19 billion), owing to

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Between 2008 and 2009, real disposable income (in 2009 dollars) declined slightly (by $19 billion), owing to a recession. The decline in real consumption expenditures was far larger: $133 billion. Explain why dividing the two does not give a good estimate of the marginal propensity to consume.

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Macroeconomics Principles And Policy

ISBN: 9781337794985

14th Edition

Authors: William J. Baumol, Alan S. Blinder, John L. Solow

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