The following table provides data for output (real GDP) and saving. a. Fill in t

Question

The following table provides data for output (real GDP) and saving. a. Fill in the missing numbers (gray shaded cells) in the table. Instructions: In the table, round your answers to 3 decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Level of Output consumption Saving APC APS and Income 240 280 300 320 340 380 400 10 12 14 What is the value of the marginal propensity to consume? What is the value of the marginal propensity to save? b. What is the break-even level of income in the table? Instructions: Enter your answer as a whole number Break-even level of income $

Explanation / Answer

MPC=Change in consumption/change in income

When income rises from 380 to 400, consumption rises from 368 to 386

A.MPC=18/20=.9

MPS=Change in savings/change in income

Change in savings=14-12=2

MPS=2/20=.1

B.Break even level of income is when savings is 0 and income is equal to consumption.

Breaken even level=260

Income C S APC APS 240 242 -2 1.008 -.008 260 260 0 1 - 280 278 2 .99 .007 300 296 4 .986 .013 320 314 6 .981 .018 340 332 8 .976 .976 360 350 10 .972 .972 380 368 12 .968 .968 400 386 14 .965 .965

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