What is the MPC? The MPS? What is the relationship between them?
Answer to relevant QuestionsHow does autonomous consumption fit into the consumption equation? What is dissaving? Describe a situation that would create dissaving in an economy. For each of the three income levels shown, pro vide appropriate data to satisfy or be consistent with the absolute and relative income hypotheses. What happens to the level of national income when intended investment is greater than saving? Suppose investment spending increases by $200 and MPC = 0.90. Calculate the effect of that increase on the first five rounds of changes in income, changes in consumption, and changes in saving. Illustrate these changes by ...
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