Consumption Function Suppose that a country's consumption function is given byC=(9\sqrt(I)+0.8\sqrt(I^(3))-0.3I)/(\sqrt(I))where C and I are expressed in billions of dollars.(a) Find the marginal propensity to save when income is $25 billion.(b) Determine the relative rate of change C with respecy to I when income is $25 bilion. 69.) Consumption Function Suppose that a country'seonsumption function is given by9I+ 0.8 - 0.31C =where C and I are expressed in billions of dollars.(a) Find the marginal propensity to save when income is$25 billion.(b) Determine the relative rate of change of C with respect to Iwhen income is $25 billion.

The marginal propensity to save (MPS) signifies the change in household saving in reaction to a…

69.) Consumption Function Suppose that a country's eonsumption function is given by 9I + 0.8/F-0.31 C = where C and I are expressed in billions of dollars. (a) Find the marginal propensity to save when income is $25 billion. (b) Determine the relative rate of change of C with respect to I when income is $25 billion.

69.) Consumption Function Suppose that a country's eonsumption function is given by 9I + 0.8/F-0.31 C = where C and I are expressed in billions of dollars. (a) Find the marginal propensity to save when income is $25 billion. (b) Determine the relative rate of change of C with respect to I when income is $25 billion.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 1.3P

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