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QUESTION
Consider the simplest macro model with demand-determined output. The equations are: C = 150 + 0.8Yd, Yd = Y-T, I = 400, G = 700, T = .2Y,
Consider the simplest macro model with demand-determined output. The equations are:
C = 150 + 0.8Yd, Yd = Y-T,
I = 400, G = 700,
T = .2Y, X = 130, and
IM = 0.14Y.
- What is the Marginal Propensity to Consume (MPC) in this model?
