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An economy is in equilibrium. Find marginal propensity to consume from the following data: National Income= 2000, Autonomous Consumption = 400, Investment Expenditure= 200

Asked by ajishaaa09 18th July 2020, 11:24 PM
Answered by Expert
C equals top enclose C space end enclose plus space M P C left parenthesis Y right parenthesis plus I

A t space e q u i l i b r i u m space l e v e l comma space

Y equals top enclose C plus MPC left parenthesis straight Y right parenthesis plus straight I

Given space the space values colon

2000 equals space 400 plus MPC left parenthesis 2000 right parenthesis plus 200
2000 equals 600 plus 2000 MPC
2000 MPC equals 2000 minus 600
2000 MPC space equals space 1400
MPC space equals space 1400 divided by 2000
MPC space equals space 0.7
Answered by Expert 19th July 2020, 2:53 PM
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