Suppose the MPC in an economy is 0.55. The APC is initially 0.65 and disposable income is $2 billion. If disposable income increases to $16 billion, what is the new level of saving? $5.6 billion $0.7 billion $7.2 billion $7.0 billion

Suppose the MPC in an economy is 0.55. The APC is initially 0.65 and disposable income is $2 billion. If disposable income increases to $16 billion, what is the new level of saving? $5.6 billion $0.7 billion $7.2 billion $7.0 billion

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter18: The Keynesian Model

Section: Chapter Questions

Problem 13SQ

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Question

Suppose the MPC in an economy is 0.55. The APC is initially 0.65 and disposable income is $2 billion. If disposable income increases to $16 billion, what is the new level of saving?

$5.6 billion
$0.7 billion
$7.2 billion
$7.0 billion

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