Question: Suppose that the linear equation for consumption in a hypothetical economy is C = 550 + 0.87 Y where C = Consumption and Y =

Suppose that the linear equation for consumption in a hypothetical economy isC= 550 + 0.87Ywhere C = Consumption and Y = Disposable Income.

Suppose that Disposable Income is $6,000. Determine:

a)the average propensity to consume

b)the average propensity to save

c)the marginal propensity to save

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