At Westonci.ca, we connect you with the best answers from a community of experienced and knowledgeable individuals. Join our platform to connect with experts ready to provide accurate answers to your questions in various fields. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.
Sagot :
The Marginal propensity to consume is 0.5
Consumption function: C = a + MPC * Yd
Where 'a' is the autonomous consumption (i.e., consumption at zero level of income)
MPC is the marginal propensity to consume.
Yd is the disposable income.
=> Yd = Y - T
So, C = 200 + MPC*Yd
=> C = 200 + MPC *(Y - T)
------------------------------------
AE = C + I + G + NX
=> AE = 200 + MPC *(Y - T) + 20 + 100 + 0
=> AE = 320 + MPC* (Y-50)
At Y = 610, AE is 600
=> 600 = 320 + MPC *(610 - 50)
=> 600 -320 = MPC * (560)
=> 280 = MPC * (560)
=> MPC = (280 / 560)
=> MPC = 0.5
Marginal propensity to consume measures how much consumers will spend or save against an overall increase in wages. In other words, if a person received an increase in income, what percentage of that new income would he spend.
Learn more about Marginal propensity here: https://brainly.com/question/17930875
#SPJ4
Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. We hope this was helpful. Please come back whenever you need more information or answers to your queries. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.