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Hector's Wealth Is Zero,he Expects to Work for Another 45

Question 13

Multiple Choice

Hector's wealth is zero,he expects to work for another 45 years at a constant salary of ?$80 000 and live for another 60 years.If Hector receives an unexpected $20 000 increase in salary his first year of work and he completely smooths consumption over his lifetime,his marginal propensity to consume is


A) 0.6.
B) 0.67.
C) 0.75.
D) 0.8.

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