Explore BrainMass
Share

Marginal propensity to consume

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

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

© BrainMass Inc. brainmass.com October 25, 2018, 1:46 am ad1c9bdddf
https://brainmass.com/economics/macroeconomics/marginal-propensity-to-consume-274274

Solution Preview

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
See Also This Related BrainMass Solution

Marginal Propensity Consumption

What does it mean to say that the marginal propensity to consume increases with income? Is this typically the case? Explain.

View Full Posting Details