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A:
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A: Marginal propensity to consume: It is used to measure the income that is spent on consumption.
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If the investment multiplicator equals 1, it means that:
Select one alternative:
- MPC = 2
- MPC (Marginal Propensity to Consume) = 1
- MPC = 0
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Solved in 2 steps
- The simple multiplier is: a) consumption spending divided by saving. b) one divided by one minus the marginal propensity to consume. c) one plus the marginal propensity to consume. d) one divided by one plus the marginal propensity to consume. e) the MPC.If the value of average propensity to save is -0.9 what will be the value of average propensity to consumeGiven a consumption function of C= $25 +0.75 YD, if disposable income is $1,000, then the average propensity to consume equals Multiple Choice 1.0. 0.6. 1.6. 0.4.
- Calculate the value of MPC if the multiplier is given to be as 1.4Assume that Consumption is C = c(Y-T); Taxes T = tY; Investment / = -bi; and Government expenditure (G) is exogenous. Determine the multiplier for an increase in the tax rate.Calculate the value of the investment multiplier when MPC is given 0.90
- Find Multiplier if the value of MPC is 0.65If a household experiences an $880 increase in consumption with a $1,100 increase in disposable income, what is the MPC for that household's consumption function? 0.2 0.8 0.25 1.25Equation for consumption is C=40/(0.8Y) where Y= yearly income = $400. A) what is the level of consumption B) what is the average propensity to consume