In Keynesian macroeconomic theory, total consumption expenditure on goods and services, C, is assumed to be a

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In Keynesian macroeconomic theory, total consumption expenditure on goods and services, C, is assumed to be a linear function of national personal income, I. The table gives the values of C and I for 2009 and 2013 in the United States (in billions of dollars).

Year 2009 2013 Total consumption (C) | $10,089 National income (I) $11,484 $12,026 $14,167


(a) Find a formula for C as a function of I.

(b) The slope of the linear function found in part (a) is the marginal propensity to consume. What is the marginal propensity to consume for the United States from 2009–2013?

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Related Book For  answer-question

College Algebra

ISBN: 978-0134697024

12th edition

Authors: Margaret L. Lial, John Hornsby, David I. Schneider, Callie Daniels

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