Suppose that disposable income, consumption, and saving in some country are $200 billion, $150 billion, and $50 billion, respectively. Next, assume that disposable income increases by $20 billion, consumption rises by $14 billion, and saving goes up by $6 billion. Instructions: In part a, round your answers to 2 decimal places. In part b, round your answers to 3 decimal places. a. What is the economy's MPC? MPC = 0.9 What is its MPS? MPS = 0.1 b. What was the APC before the increase in disposable income? APC before What was the APC after the increase? 0.75 APC after = 0.76
Suppose that disposable income, consumption, and saving in some country are $200 billion, $150 billion, and $50 billion, respectively. Next, assume that disposable income increases by $20 billion, consumption rises by $14 billion, and saving goes up by $6 billion. Instructions: In part a, round your answers to 2 decimal places. In part b, round your answers to 3 decimal places. a. What is the economy's MPC? MPC = 0.9 What is its MPS? MPS = 0.1 b. What was the APC before the increase in disposable income? APC before What was the APC after the increase? 0.75 APC after = 0.76
Chapter1: Making Economics Decisions
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Transcribed Image Text:Suppose that disposable income, consumption, and saving in some country are $200 billion, $150 billion, and $50 billion,
respectively. Next, assume that disposable income increases by $20 billion, consumption rises by $14 billion, and saving
goes up by $6 billion.
Instructions: In part a, round your answers to 2 decimal places. In part b, round your answers to 3 decimal places.
a. What is the economy's MPC?
MPC = 0.9
What is its MPS?
MPS = 0.1
b. What was the APC before the increase in disposable income?
APC before
What was the APC after the increase?
0.75
APC after= 0.76
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