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Marginal propensity to consume (MPC)

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You are given the following information about the economy of Australia.

Disposible income Savings
(billions of dollars per year)
0 -5
100 20
200 45
300 70
400 95
a. Calculate the marginal propensity to save.
b. Calculate consumption at each level of disposible income.
c. Calculate the marginal propensity to consume.

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Solution Summary

Marginal propensity to consume (MPC) is determined.

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You are given the following information about the economy of Australia.

Disposable income Savings
(billions of dollars per year)
0 -5
100 20
200 45
...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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