Assume an economy in which: (i) there are no exports and no imports, (ii) investors always want to spend $200 billion, or I = 200, (iii) government spends $500 billion and tax revenue is $200 billion, (iv) consumption is a linear function of disposable income, C=100+0.8Yd What is the marginal propensity to save (MPS)?
Assume an economy in which: (i) there are no exports and no imports, (ii) investors always want to spend $200 billion, or I = 200, (iii) government spends $500 billion and tax revenue is $200 billion, (iv) consumption is a linear function of disposable income, C=100+0.8Yd What is the marginal propensity to save (MPS)?
Chapter23: The Aggregate Expenditure Model
Section: Chapter Questions
Problem 6P
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Assume an economy in which:
(i) there are no exports and no imports,
(ii) investors always want to spend $200 billion, or I = 200,
(iii) government spends $500 billion and tax revenue is $200 billion,
(iv) consumption is a linear function of disposable income, C=100+0.8Yd
What is the marginal propensity to save (MPS)?
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