Find the consumption function, saving function. Calculate the marginal propensity to saving (MPS) when Y =100. Do you agree that the sum o MPS and MPC equal to one? Explain your answer.
Find the consumption function, saving function. Calculate the marginal propensity to saving (MPS) when Y =100. Do you agree that the sum o MPS and MPC equal to one? Explain your answer.
Chapter9: Aggregate Expenditures
Section: Chapter Questions
Problem 10E
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Question
![Question-5
If the marginal propensity to consume is given by
1
MPC =
3
+
1
2√y
Initial condition, C = 19/3 when Y = 4
Find the consumption function, saving function.
Calculate the marginal propensity to saving (MPS) when Y =100. Do you agree that the sum of
MPS and MPC equal to one? Explain your answer.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb4d2f08b-d7d8-4a98-b74f-5a57471c8642%2Fdf379d08-6d39-4c15-9d9c-6409bf1de1d6%2Ffzefb8q_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question-5
If the marginal propensity to consume is given by
1
MPC =
3
+
1
2√y
Initial condition, C = 19/3 when Y = 4
Find the consumption function, saving function.
Calculate the marginal propensity to saving (MPS) when Y =100. Do you agree that the sum of
MPS and MPC equal to one? Explain your answer.
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