Suppose the MPC is 0.6. If at each level of income, people want to consume $4,000 more,
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Suppose the MPC is 0.6. If at each level of income, people want to consume $4,000 more, how will income change? How will consumption change (break C ’s change into its initial autonomous increase and the induced secondary consumption respending)? Assume I is fixed.
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The multiplier is 104 or 25 so income goes ...View the full answer
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Muhammad Haroon
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