Finding marginal propensity to consume

Assignment Help Macroeconomics

Reference no: EM1313473

Consider the following data :

Year	Real Disposable Income	Real Consumption
0	20,000	14,000
1	30,000	19,000
2	40,000	24,000

For now, assume that no other variable (besides real disposable income) that could affect real consumption has changed between Year 0, Year 1, and Year 2.

a) Use the above data to draw a consumption function.

b) What is the marginal propensity to consume.

c) What is the slope of the consumption function (you should give a numerical answer, not a formula)?

Reference no: EM1313473

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