Question

Refer to the given consumption schedules. DI signifies disposable income and C represents consumption expenditures. All figures are in billions of dollars. At an income level of $400 billion, the average propensity to save in economy (2) is:___________

Answer 1

Answer:please refer to the explanation section

Explanation:

The question is incomplete, consumption schedules the question refers to are not provided in the question. we will however provide assumed figures illustrate how the procedure for calculating Average Propensity to save.

Income  $400Billion, consumption $300Billion

Income is $300Billon, consumption $250Billion.

Marginal Propensity to consume = Change in consumption/change in income

Marginal Propensity to consume = (300 - 250)/(400 - 300)

Marginal Propensity to consume = 50/100 = 0.5

Marginal Propensity to save = 1 - MPC = 1 - 0.5

Marginal Propensity to save = 0.5