From the following data calculate marginal propensity to consume.
From the following data calculate marginal propensity to consume.
(i) Equilibrium level of income = 2,000
(ii) Autonomous consumption = 200
(iii) Investment expenditure = 800
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Y = C bar + (MPS)Y + I
2000 = 200 + MPC(2000) + 800
2000 MPC = 2000 - 200 - 800
MPC = 1000/2000 = 0.5
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