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SVEN [57.7K]
3 years ago
10

If aggregate expenditures increase by $14 billion and equilibrium GDP consequently increases by $70 billion, then the marginal p

ropensity to consume in the economy must be
Business
1 answer:
Alchen [17]3 years ago
7 0

Answer:

0.2

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

Marginal propensity to consume is the proportion of disposable income that is spent on consumption

Marginal propensity to consume = amount consumed / disposable income

Marginal propensity to save is the proportion of disposable income that is saved

Marginal propensity to save = amount saved / disposable income

MPC + MPS = 1

MPC = $14 billion /  $70 billion = 0.2

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