Macroeconomics 19th Edition by Campbell McConnell , Stanley Brue,Sean Flynn

Exercise 3

Advanced Analysis Suppose that the linear equation for consumption in a hypothetical economy is C = 40 +.8 Y. 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.