The maginal propensity to consume of country is 0.8 and the country increases its investment by 5 billion. Calculate the marginal propensity to save.
The maginal propensity to consume of country is 0.8 and the country increases its investment by 5 billion. Calculate the marginal propensity to save.
Chapter23: The Aggregate Expenditure Model
Section: Chapter Questions
Problem 6P
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The maginal propensity to consume of country is 0.8 and the country increases its investment by 5 billion. Calculate the marginal propensity to save.
Expert Solution
Step 1
Marginal Propensity to Consume (MPC) = 0.8
Change in investment = 5 billion
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