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diways chat: Disposable Income = (Consumption + Savings, Consumption - Savings, or Savings - Consumption). (c.) Therefore, it must also be crue that: 1 = (MPC - MPS, MPS - MPC, or MPC + MPS). Explain your answers briefly.

diways chat: Disposable Income = (Consumption + Savings, Consumption - Savings, or Savings - Consumption). (c.) Therefore, it must also be crue that: 1 = (MPC - MPS, MPS - MPC, or MPC + MPS). Explain your answers briefly.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose John gets a sales bonus at his place of work that gives him an extra $600 of disposable income. He chooses to spend $360 and save the remaining $240. (a.) From this, you can tell that John's marginal propensity to consume (MPC) is (0.60, 0.40, 0.24, or 0.36), and his marginal propensity to save (MPS) is (0.60, 0.40, 0.24, or 0.36). (b.) Mathematically, it must always be true that: Disposable Income = (Consumption + Savings, Consumption - Savings, or Savings - Consumption). (c.) Therefore, it must also be true that: 1 = (MPC - MPS, MPS - MPC, or MPC + MPS). Explain your answers briefly.
Transcribed Image Text:Suppose John gets a sales bonus at his place of work that gives him an extra $600 of disposable income. He chooses to spend $360 and save the remaining $240. (a.) From this, you can tell that John's marginal propensity to consume (MPC) is (0.60, 0.40, 0.24, or 0.36), and his marginal propensity to save (MPS) is (0.60, 0.40, 0.24, or 0.36). (b.) Mathematically, it must always be true that: Disposable Income = (Consumption + Savings, Consumption - Savings, or Savings - Consumption). (c.) Therefore, it must also be true that: 1 = (MPC - MPS, MPS - MPC, or MPC + MPS). Explain your answers briefly.
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