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What is the marginal propensity to consume

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Reference no: EM132606308

Year disposable incomeconsumer spending ( millions of dollars) ( millions of dollars)

2009 $100 $180

2010 350 380

2011 300 340

2012 400 420

2013 375 400

2014 500 500

1. From 2009 to 2014, Eastlandia experienced large fluctuations in both aggregate consumer spending and disposable income, but wealth, the interest rate, and expected future disposable income did not change. The accompanying table shows the level of aggregate consumer spending and disposable income in millions of dollars for each of these years. Use this information to answer the following questions.

a) What is the marginal propensity to consume? What is the marginal propensity to save?

b) What is the aggregate consumption function?

c) Plot the aggregate consumption function for Eastlandia.

d) Find the aggregate savings function and plot it

Reference no: EM132606308

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