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If the Average Propensity to Consume Is Initially 0

Question 67

Multiple Choice

If the average propensity to consume is initially 0.8, the marginal propensity to consume is 0.75, and real disposable income increases by $1000, the value of saving


A) increases by $200.
B) increases by $250.
C) decreases by $250.
D) decreases by $200.

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