QUESTION 8 Suppose that for a given year, Total Disposable Income was 12,912 in

Question

QUESTION 8 Suppose that for a given year, Total Disposable Income was 12,912 in June and was 12,969 in July. For this same given year, Total Consumption was 12,243 in June and was 12,276 in July. Based on the data provided above, what was the Marginal Propensity to Consume (MPC) for this economy? Round your answer to 2 decimal places. Include the decimal (.) in your answer. Type in only your numeric answer. Do not include any other symbols such as S or%; or any words such as "dollar", "million, etc. MPC) lnelude any other symlssimal places, Iaclude

Explanation / Answer

Answer

Marginal propensity to consume=change in consumption/change in income

change in consumption=12276-12243=33

change in income=12969-12912=57

MPC=33/57

=0.578947368

The MPC is 0.58

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