09. Consider the following model. Expenditure is given by: E=C+I+G The consumption function is specified as: C=c+cY We assume a closed macroeconomic system so that: Y=E Which is the correct representation of income as a function of autonomous expenditures and the marginal propensity to consume?

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Q: 09. Consider the following model. Expenditure is given by: E=C+I+G The consumption function is…

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A: Marginal propensity to consume is the ratio of change in consumption and change in income level.