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1 year ago

suppose consumers' disposable income increased by $341 billion and their spending increased by $299 billion. what was the mpc?

1 answer:

6 0

According to the question, consumers' disposable income increased by $341 billion and their spending increased by $299 billion. The MPC was 0.877.

The percentage of an overall salary increase that a customer spends on purchasing goods and services rather than saving is known as the marginal propensity to consume (MPC) in economics.

Keynesian macroeconomic theory includes a concept known as marginal propensity to consume, which is determined as the change in consumption divided by the change in income.

Here,

Income increased = $ 341

Spending increased = $ 299

MPC = 299/341

MPC = 0.877

Therefore, consumers' disposable income increased by $341 billion and their spending increased by $299 billion. The MPC was 0.877.

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Debit ; Accounts Receivable (80 x $8.00) $640

Credit : Revenue $640

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Credit : Accounts Payable $900

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Debit ; Accounts Receivable (120 x $8.75) $1,050

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jan 20

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Credit : Accounts Payable $1,120

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Debit ; Accounts Receivable (100 x $9.00) $900

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jan 4

Debit ; Accounts Receivable (80 x $8.00) $640

Debit : Cost of Sales (80 x $5.00) $400

Credit : Revenue (80 x $8.00) $640

Credit : Inventory (80 x $5.00) $400

jan 11

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Credit : Accounts Payable $900

jan 13

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Debit : Cost of Sales (20 x $5.00 + 100 x $6) $700

Credit : Revenue (120 x $8.75) $1,050

Credit : Inventory (20 x $5.00 + 100 x $6) $700

jan 20

Debit ; Purchases (160 x $7) $1,120

Credit : Accounts Payable $1,120

jan 27

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Credit : Revenue (100 x $9.00) $900

Credit : Inventory (50 x $6.00 + 50 x $7) $650

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Therefore,

Gross Profit = $2,590 - $1,750

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