Question

Suppose that disposable income, consumption, and saving in some country are $400 billion, $350 billion, and $50 billion, respectively. Next, assume that disposable income increases by $40 billion, consumption rises by $36 billion, and saving goes up by $4 billion. a. What is the economy’s MPC?

Answer 1

a. 0.20

Step-by-step explanation:

(32/40) = .8

(8/40)= 0.20