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Suppose Kate gets a sales bonus at her place of work that gives her an extra $700 of disposable income. She chooses to spend $560
Suppose Kate gets a sales bonus at her place of work that gives her an extra $700 of disposable income. She chooses to spend $560 and save the remaining $140. From this, you can tell that Kate's marginal propensity to consume (MPC) is , and her marginal propensity to save (MPS) is . Mathematically, it must always be true that: Disposable Income = Therefore, it must also be true that: 1 =
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