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Suppose That John Earns a Disposable Annual Income of $50,000

Question 127

Multiple Choice

Suppose that John earns a disposable annual income of $50,000 and allocates $10,000 of this for necessities. Any additional income beyond that is both spent and saved. If John's MPC is 0.8, how much money will he save?


A) $10,000
B) $40,000
C) $12,000
D) $8,000

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