Question: 1) Keynesian problems Formulas Consumption = autonomous consumption plus the product of the additional amount of consumption per dollar of income and disposable income Consumption

1) "Keynesian" problems

Formulas

Consumption = autonomous consumption plus the product of the additional amount of consumption per dollar of income and disposable income

  • Consumption Function: C= a + MPC (Y)

Marginal Propensity to Consume:additional amount of consumption per dollar of income

  • Change in consumption divided by change in disposable income

Marginal Propensity to Save = the additional amount of savings per dollar of income earned.

  • 1-MPC
  • Change in savings divided by change in disposable income

Spending Multiplier:

  • 1) "Keynesian" problems FormulasConsumption = autonomous consumption plus the product of the

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