Homework Answers
A) MPC=0.8
change in C=MPC*change in Yd=0.8(400)=320
Comsumtion will increase by $320
b)multiplier=1/1-mpc=1/1-0.8=1/0.2=5
Thus change in Y=5*(-1200)=-6000
real GdP decreases by 6000
c)C=100+0.8Yd
d) Of saving rate decreases due to MPS decrease then Mpc will increases.
however if saving rate decreases because of decrease in autonomous saving then mpc is unaffected.
Add Answer to:
A,B,C,D
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help? if possible not cursive. please
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