Question

6. The marginal propensity to consume (mpc) is the: A, amount by which disposable income increases when consumption increases by $1 B. amount by which consumption increases when disposable income increases by $1 percentage by which consumption increases when disposable income increases by 1% D, percentage by which disposable income increases when consumption increases by 1% 7. Data on output and planned aggregate expenditure in Macroland are given below. 2,000 3,000 4,000 5,000 6,000 2,300 3,200 4,100 5,000 5,900 Based on these data, the short-run equilibrium level of output is A. 2,000 B. 3,200 C. 4,100 D. 5,000

Answer 1

1.
The answer is B.
the amount by which consumption increases when disposable income increases by $1.
Marginal propensity to consume is the amount by which consumption increases per $1 increase in consumption.
2.
The answer is D. 5000
The short-run equilibrium level of output is where the output level Y is equal to the planned aggregate expenditure.