Between 1990 and 1991, real disposable income (in 2000 dollars) barely increased at all, owing to a

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Between 1990 and 1991, real disposable income (in 2000 dollars) barely increased at all, owing to a recession. (It rose from $5,324 billion to $5,352 billion.) Use the data on real consumption expenditures given on the inside back cover of this book to compare the change in C to this $28 billion change in DI. Explain why dividing the two does not give a good estimate of the marginal propensity to consume.

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Macroeconomics Principles And Policy

ISBN: 9780324586213

11th Edition

Authors: William J. Baumol, Alan S. Blinder

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