C = 300 + 0.8Yd; C = consumption function; Yd (Y-T) = disposable income I = 200;
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C = 300 + 0.8Yd; C = consumption function; Yd (Y-T) = disposable income I = 200; I = Investment G = 400; G = Government expenditure T = 200; T = Tax revenue Also assume that Yf = Full employment GDP (Potential GDP) = 5,000
The MPC and MPS for the economy is respectively:
a. 0.9 and 0.1
b. 0.85 and 0.15
c. 0.75 and 0.25
d. 0.80 and 0.20
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