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Misha Larkins [42]
3 years ago
6

If the average propensity to consume is 0.75, and the marginal propensity to consume is 0.70, if income rises by $4,000, consump

tion will increase by _____. (Remember when we use APC versus MPC. Use only one for this question).
Business
1 answer:
LUCKY_DIMON [66]3 years ago
7 0

Answer:

$2,800

Explanation:

The computation of the increase in consumption is shown below:

= Marginal propensity to consume × rise in income

= 0.70 × $4,000

= $2,800

Hence, the consumption would be increased by $2,800

We simply applied the above formula i.e. marginal propensity to consume is multiplied with the rise in income so that the correct answer could come

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Answer:

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