Question: Hi! Could you help me with this ? What effect will the following have on the marginal propensity to consume (mpc): (a) a rise in
Hi! Could you help me with this ?
What effect will the following have on the marginal propensity to consume (mpc): (a) a rise in the rate of income tax;
(b) the economy begins to recover from recession;
(c) people anticipate that the rate of inflation is about to rise;
(d) the government redistributes income from the rich to the poor? In each case sketch what would happen to the consumption function.
Exercise 2
What is the relationship between the mpc and the mpw?Explain
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