Calculate the marginal propensity to consume

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Question 1: Below are consumption and disposable income (YD) data.

 

Disposable Income (YD)

Consumption

2013

$250 000

$180 000

2014

$310 000

$216 000

a. Calculate the marginal propensity to consume (mpc) and then the multiplier in this economy.

b. Using the multiplier you found in part a, calculate the effect of a $6000 increase in investment spending on real GDP.

Reference no: EM13746639

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