The following table is a consumption schedule. Assume taxes and transfer payments are zero and that all saving is personal saving.
(GDP = DI)
C
S
APC
APS
$1,500
$1,540
$_____
1.027
–0.027
$1,600
$1,620
_____
1.013
–0.013
$1,700
$1,700
_____
_____
_____
$1,800
$1,780
_____
0.989
0.011
$1,900
$1,860
_____
0.979
0.021
$2,000
$1,940
_____
_____
_____
$2,100
$2,020
_____
0.962
0.038
$2,200
$2,100
_____
_____
_____
Compute saving at each of the eight levels of disposable income and the missing average propensities to consume and to save.
1. The break-even level of disposable income is $________.
2. As disposable income rises, the marginal propensity to consume remains constant. Between each two GDPs the MPC can be found by dividing $________ by $________, and is equal to _______.
3. The marginal propensity to save also remains constant when the GDP rises. Between each two GDPs the MPS is equal to $________ divided by $________, or to _______.
The following table is a consumption schedule. Assume taxes and transfer payments are zero and that all saving is personal saving.
(GDP = DI) |
C |
S |
APC |
APS |
$1,500 |
$1,540 |
$_____ |
1.027 |
–0.027 |
$1,600 |
$1,620 |
_____ |
1.013 |
–0.013 |
$1,700 |
$1,700 |
_____ |
_____ |
_____ |
$1,800 |
$1,780 |
_____ |
0.989 |
0.011 |
$1,900 |
$1,860 |
_____ |
0.979 |
0.021 |
$2,000 |
$1,940 |
_____ |
_____ |
_____ |
$2,100 |
$2,020 |
_____ |
0.962 |
0.038 |
$2,200 |
$2,100 |
_____ |
_____ |
_____ |
Compute saving at each of the eight levels of disposable income and the missing average propensities to consume and to save.
1. The break-even level of disposable income is $________.
2. As disposable income rises, the marginal propensity to consume remains constant. Between each two GDPs the MPC can be found by dividing $________ by $________, and is equal to _______.
3. The marginal propensity to save also remains constant when the GDP rises. Between each two GDPs the MPS is equal to $________ divided by $________, or to _______.