Answered: Calculate the value of final…

Calculate the value of final Consumption Expenditure when the value of national income is $5000 , autonomous consumption is $1000 and marginal propensity to consume is 0.8

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Calculate the value of final Consumption Expenditure when the value of national income is $5000 , autonomous consumption is $1000 and marginal propensity to consume is 0.8

Definition Definition Monetary value of all goods and services produced in an economy during a financial year. National income also refers to the total income earned by the factors of production during a financial year.

Expert Solution

Basic concept

# The value of the final consumption expenditure is given by the equation:-

C = Autonomous consumption + b(Y)

Where b is marginal propensity to consume and Y is national income

Step by step

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