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Suppose There Are Three Economies with 3 Different Consumption Functions

Question 154

Multiple Choice

Suppose there are three economies with 3 different consumption functions: Country A: C = 100 + 0.8Y Country B: C = 200 + 0.75 Y
Country C: C = 75 + 0.9Y
In which of these countries is the marginal propensity to consume the largest?


A) Country B
B) Country C
C) Country A
D) All countries have the same marginal propensity to consume.

Correct Answer:

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