Question

For an economy, if C = 400 + 0.8Yd, Yd = Y − T, T = 300 + 0.2Y , find MPC. 

A 0.93 Correct Answer Incorrect Answer
B 0.64 Correct Answer Incorrect Answer
C 0.81 Correct Answer Incorrect Answer
D 0.2 Correct Answer Incorrect Answer
E 0.1 Correct Answer Incorrect Answer

Solution

MPC is the slope coefficient of consumption function. C = a + cY.

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