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Determine the marginal propensity to consume

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ADVANCED ANALYSIS

Suppose that the linear equation for consumption in a hypothetical economy is C = 40 + .8Y. Also suppose that income (Y ) is $400. Determine

(a) the marginal propensity to consume,

(b) the marginal propensity to save,

(c) the level of consumption,

(d ) the average propensity to consume,

(e) the level of saving, and

( f ) the average propensity to save. L

Reference no: EM131243978

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