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David receives a tax refund of $800. He spends $600 and saves $200. David's marginal propensity to consume is:
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David receives a tax refund of $800. He spends $600 and saves $200. David's marginal propensity to consume is:

User Allan Rwakatungu
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1 Answer

2 votes

Answer:

0.75

Step-by-step explanation:

David receives a tax refund of $800

He spends $600 and then saves $200

Therefore David's marginal propensity to consume can be calculated as follows

= 600/800

= 0.75

Hence David marginal propensity to consume is 0.75

User Verhaeren
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