3. Political turbulences and the pandemic affected Hong-Kong's consumer confidence significantly in 2020. Now, that the pandemic is under control in Hong Kong, marginal propensity to consume has increased from 0.5 to 0.7.

a. Use the consumption model to assess the effects of an increase in MPC on overall consumption. Use the model (math) and the graphs. Explain.

b. How it will affect overall aggregate demand? Use the Keynesian cross (model, graph and explanation)