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Marginal propensity to consume

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A firm purchases a new computer system for $1M. If the marginal propensity to consume is 0.8, the final change in national income will be

a. $800,000

b. $1M

c. $1.2M

d. $4M

e. $5M

Which answer is correct, can you explain

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A firm purchases a new computer system for $1M. If the marginal propensity to consume is 0.8, the final change in ...

Solution Summary

Responses discusses the impact of marginal propensity to consume on Income

$2.19