Question

(1) (2) (3) DI C DI C DI C $ 0 $ 4 $ 0 $ 65 $ 0 $ 2 10 11 80 125 20 20 20 18 160 185 40 38 30 25 240 245 60 56 40 32 320 305 80 74 50 39 400 365 100 92 Refer to the given consumption schedules. DI signifies disposable income and C represents consumption expenditures. All figures are in billions of dollars. The marginal propensity to consume in economy (1) is Multiple Choice 0.5. 0.8. 0.3. 0.7.

Answer 1

Answer:

the marginal propensity to consume in the economy is 0.7

Explanation:

The calculation of the marginal propensity to consume in the economy is given below:

As we know that

Marginal propensity to consume = Change in consumption ÷ Change in income

= 7 ÷ 10

= 0.7

Hence, the marginal propensity to consume in the economy is 0.7

Therefore the last option is correct

The same is relevant