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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,

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How do you calculate the marginal propensity to consume and to save?

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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 dollars

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