What is the marginal propensity to save

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Reference no: EM131022997

Quiz 4-

1. Use the following table for this set of questions.

Y (Real GDP)

T - TR

C

S (private saving)

I

G

X- M

Change in Inventories

Change in Real GDP

100

20

60

 

20

20

20

 

 

300

20

 

 

20

20

20

 

 

500

20

 

 

20

20

20

 

 

700

20

360

 

20

20

20

 

 

a. Given the above information, what is the marginal propensity to consume? Show your work and provide the general formula for the MPC.

b. Given the above information, what is the marginal propensity to save? Show your work and provide the general formula for the MPS.

c. Given the above information, what is autonomous consumption? Assume that this is the constant in the consumption function written with respect to disposable income? Show how you found the value for autonomous consumption.

d. Write the equation for saving as a function of Y.

e. Fill in all the missing cells in the above table.

f. Calculate the equilibrium value of Y given the above information. Show your work.

Reference no: EM131022997

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