The objective of the activity is to determine the importance of consumer spending in determining the real GDP of a country. To find out what is the importance of consumption in the economy of Puerto Rico, we will use the most recent data available (2011-2020).

You must look for the data of Private Personal Consumption and Available Personal Income in current or monetary terms. (Table 1)

The work to be presented will consist of:

a. Plot the graph of the consumption function for the available data. (2011-2020)

b. calculate the marginal propensity to consume for the period taking each couple of years (2011-2010; 2010-2009; and so on). PMC = ?C / ?YD

c. Calculate the marginal propensity to save for the period taking each couple of years (2011-2010; 2010-2009; and so on). PMA = ?A / ?YD

d. calculate the multiplier for each of the previous periods. The formula to calculate the multiplier is M = 1 / (1 - PMC).

Table #1:

2011 2012 2013 2014 2015 2016 2017r 2018r 2019r 2020p Total a precios corrientes Total in current dollars (En millones de dolares) (In millions of dollars) Producto bruto 65,720.7 68,085.7 68,944.9 68,797.5 69,602.0 69,985.2 69,049.5 67,739.5 70,765.0 70,186.9 Gross product Ingreso neto 51,037.6 54,207.0 55,390.4 55,378.6 55,994.6 56,192.4 54,283.5 54,089.9 55,807.4 57,323.3 Net income Ingreso personal 61,178.7 62,227.7 64,159.7 63,115.7 63,756.3 63,600.7 64,863.0 70,148.3 68,163.2 71,080.0 Personal income Ingreso personal disponible 58,716.7 59,865.4 61,865.5 60,781.0 61,237.8 61,359.0 62,655.9 67,944.3 65,557.0 68,912.4 Disposable personal income Gastos de consumo person 58,154.8 60,897.0 62,477.6 61,899.4 61,640.5 60,979.4 62,453.8 63,453.0 66,956.4 65,184.8 Personal consumption expenditures Producto interno bruto 100,351.7 101,564.8 102,450.0 102,445.8 103,375.5 104,336.7 103,445.5 100,925.0 104,914.6 103,138.3 Gross domestic product Inversion interna bruta de c 9,605.1 10,356.7 9,672.7 9,031.3 8,804.3 8,304.3 8,256.1 15,233.3 15,028.8 11,877.3 Gross domestic fixed investment Total a precios constantes de 1954 Total at constant 1954 dollars (En millones de dolares) (In millions of dollars) Producto bruto 6,431.7 6,466.2 6,457.6 6,343.9 6,292.2 6,191.5 5,991.9 5,730.5 5,831.3 5,643.9 Gross product Ingreso personal (1) 10,068.2 10,015.5 10,235.3 9,846.0 9,726.1 9,529.6 9,471.3 9,969.9 9,532.0 9,251.6 Personal income (1) Ingreso personal disponible 9,663.0 9,635.4 9,869.3 9,481.8 9,341.9 9,193.7 9,091.7 9,656.7 9,167.5 8,969.5 Disposable personal income (1) Gastos de consumo person 9,570.5 9,801.5 9,967.0 9,656.3 9,403.3 9,136.3 9,061.5 9,018.7 9,362.7 8,484.4 Personal consumption expenditures Producto interno bruto 10,589.2 10,592.3 10,559.8 10,434.7 10,324.6 10,194.2 9,900.0 9,489.4 9,630.3 9,254.4 Gross domestic product Inversion interna bruta de c 1,464.8 1,542.3 1,424.0 1, 3373 1,279.1 1,222.8 1,371.0 2,078.7 2,095.5 1,631.5 Gross domestic fixed investment Per capita a precios corrientes Per capita at current dollars (En dolares) (In dollars) Producto bruto 17,762 18,618 19,077 19,304 19,864 20,345 20,514 20,785 22,156 n/d Gross product Ingreso neto 13, 794 14,823 15,327 15,538 15,980 16,335 16,127 16,597 17,473 n/d Net income Ingreso personal 16,535 17,016 17,753 17,709 18,195 18,489 19,270 21,524 21,341 n/d Personal income ngreso personal disponible 15,869 16,370 17,718 17,054 17,477 17,837 18,614 20,848 20,525 n/d Disposable personal income Gastos de consumo person 15,718 16,652 17,288 17,368 17,591 17,727 18,554 19,470 20,963 n/d Personal consumption expenditures Producto interno bruto 27,122 27,773 28,348 28,745 29,502 30,330 30,732 30,968 32,847 n/d Gross domestic product Per capita a precios constantes Per capita at constant de 1954 (En dolares) 1954 dollars (In dollars) Producto bruto 1,738 1,768 1,787 1,780 1,796 1,800 1,780 1,758 1,826 n/d Gross product Ingreso personal 2,721 2, 739 2,832 2,763 2,776 2,770 2,796 3,059 2,984 n/d Personal income Ingreso personal disponible 2,612 2,635 2, 731 2,660 2,666 2,673 2,701 2,963 2,870 n/d Disposable personal income Gastos de consumo person 2,587 2,680 2,758 2,709 2,684 2,656 2,692 2,767 2,931 n/d Personal consumption expenditures Producto interno bruto 2,862 2,896 2,922 2,928 2,947 2,963 2,941 2,912 3,015 n/d Gross domestic product2017 2012 2013 2014 2015 2016 2017r 2018r 2019r 2020p Otras estadisticas Other statistics Crecimiento en el producto bruto (%) Increase in gross product (%) A precios corrientes 2.2 3.6 1.3 (0.2) 1.2 0.6 (1.3) (1.9) 4.5 (0.8) At current prices A precios constantes (1.7) 0.5 (0.7) (1.8) (0.8) (1.6) (3.2) (4.4 ) 1.8 (3.2) At constant prices Ingreso personal promedio por familia (2) Average personal income per family (2) (En dolares) (At dollars) A precios corrientes 49,605 51,048 53,259 51,356 52,766 51,769 53,956 58,116 57,621 n/d At current dollars A precios constantes de 1: 8,163 8,217 8,496 8,013 8,050 7,756 7,829 8,260 8,058 n/d At constant 1954 dollars Numero promedio de personas Average number of persons por familia 3.0 3.0 3.0 2.9 2.9 2.8 2.8 2.7 2.7 2.8 per family Sueldos y jornales 25,268.5 25,522.0 25,710.0 25,188.5 24,767.8 24,346.8 24,286.9 23,978.6 23,901.5 24,358.0 Salaries and wages (En millones de dolares) (In millions of dollars) Empleo, total Employment, total (En miles de personas) (3 1,043 1,024 1,012 987 977 989 982 968 995 986 (In thousands of persons) (3) Productividad (En dolares) 10,153 10,344 10,435 10,572 10,568 10,297 10,071 9,803 9,679 9,386 Productivity (In dollars) (4) indice de precios al consumidor Consumer's price index para todas las familias (5) 171.8 714.7 115.7 116.8 116.4 116.2 116.9 118.8 119.4 719.4 for all families (5) Tasa de inflacion 1.8 2.6 0.9 0.9 (0.3) (0.2) 0.6 1.6 0.5 0.0 Inflation Rate Poblacion (En miles de per 3,700 3,657 3, 614 3,564 3,504 3, 440 3,366 3,259 3,194 n/dl Population (In thousands of persons) (6)