Using the chart below and your extensive knowledge of the Keynesian economy, answer the following questions: Disposable Income Consumption $0 $300 500 750 1,000 1,200 11 1,500 1,650 2,000 2,100 2,500 2,550 3,000 3,000 1. What is the marginal propensity to consume (mpc)? 2. What is the marginal propensity to save (mps)? 3. What is the multiplier? 4. How is the consumption function written in this example? 5. What does savings equal if disposable income is $2,000?

Using the chart below and your extensive knowledge of the Keynesian economy, answer the following questions: Disposable Income Consumption $0 $300 500 750 1,000 1,200 11 1,500 1,650 2,000 2,100 2,500 2,550 3,000 3,000 1. What is the marginal propensity to consume (mpc)? 2. What is the marginal propensity to save (mps)? 3. What is the multiplier? 4. How is the consumption function written in this example? 5. What does savings equal if disposable income is $2,000?

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter11: Fiscal Policy: The Keynesian View And Historical Development Of Macroeconomics

Section: Chapter Questions

Problem 12CQ

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