Allie has a marginal propensity to consume of 0.75. What does this mean? a. He's spending more than he's making in income b. 75 cents of every additional dollar of his income is saved. c. 75 cents of every additional dollar of his income is spent on consumption. d. 25 cents of every additional dollar of his income is spent on consumption.
Allie has a marginal propensity to consume of 0.75. What does this mean? a. He's spending more than he's making in income b. 75 cents of every additional dollar of his income is saved. c. 75 cents of every additional dollar of his income is spent on consumption. d. 25 cents of every additional dollar of his income is spent on consumption.
Chapter9: Aggregate Demand
Section: Chapter Questions
Problem 5.12P
Related questions
Question
Allie has a marginal propensity to consume of 0.75. What does this mean?
a. He's spending more than he's making in income
b. 75 cents of every additional dollar of his income is saved.
c. 75 cents of every additional dollar of his income is spent on consumption.
d. 25 cents of every additional dollar of his income is spent on consumption.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you