Short-answer Problems

1)Differentiate between the average propensity to consume and the marginal propensity to consume.

2)Define marginal propensity to consume (MPC) and marginal propensity to save (MPS). How does MPC) and MPS concepts are related?

3)Which is the most volatile component of total spending?What four factors contribute to the volatility of this component of total spending?

4)Explain three factors that can influence the level of household consumption in an economy.

5)a)Complete the accompanying table.