11. Critical analysis Q13 Suppose that when your income increases by $300, your consumption expenditures increases by $225. Your marginal propensity to consume (MPC) is . If your MPC was the same as the MPC for the economy as a whole, the expenditure multiplier for the economy would be Thus, a $5 million investment project would increase income by $ million in total.
11. Critical analysis Q13 Suppose that when your income increases by $300, your consumption expenditures increases by $225. Your marginal propensity to consume (MPC) is . If your MPC was the same as the MPC for the economy as a whole, the expenditure multiplier for the economy would be Thus, a $5 million investment project would increase income by $ million in total.
Chapter9: Aggregate Expenditures
Section: Chapter Questions
Problem 10E
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Transcribed Image Text:11. Critical analysis Q13
Suppose that when your income increases by $300, your consumption expenditures increases by $225.
Your marginal propensity to consume (MPC) is
. If your MPC was the same as the MPC for the economy as a whole, the expenditure
multiplier for the economy would be
Thus, a $5 million investment project would increase income by $
million in total.
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