In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption function is C = 1000 + 0.9Y.

Thus, autonomous consumption is -------- and the marginal propensity to consume is ---------. A consumer whose income increases by $100 will increase consumption by $ -----------.

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Joshua StredderLv10

28 Sep 2019

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Related questions

If C= 500 + 0.75Y

C= consumption and Y= disposable income,

GDP is given as $6000.

GDP= Y

1) Find consumption and savings?

2) If GDP increases by $1000, by how much will consumption increase .........750................... and by how much will savings be.........250..............

3) If GDP = $6000, Find APC and APS?

APC is the average propensity to consume and APS is average propensity to save (APC + APS =1).

APC = Consumption/Disposable income

Suppose you have the following information about a fictitious economy with no taxes. What is the Marginal Propensity to Consume in this economy?

Disposable income $	Consumption $
100	10
200	20
300	30
400	40

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