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How do you calculate the marginal propensity to consume and to save? Marginal Propensity to Consume The consumption function of an economy is as follows,
How do you calculate the marginal propensity to consume and to save?
Marginal Propensity to Consume The consumption function of an economy is as follows, where C(x) is the personal consumption expenditure and x is the personal income, both measured in billions of dollars. C(x) = 0.609x + 92.9 Find the rate of change of consumption (in billions of dollars) with respect to income, - .. This quantity is called the marginal propensity to consume. de dxMarginal Propensity to Save Suppose C(x) measures an economy's personal consumption expenditure and x the personal income, both in billions of dollars. Then the following function measures the economy's savings corresponding to an income of x billion dollars. S(x) = x - C(x) (income minus consumption) The quantity - dx " below is called the marginal propensity to save. ds dc dx dx For the following consumption function, find the marginal propensity to save. C(x) = 0.603x + 97.13 $ billion per billion dollarsStep by Step Solution
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