Q19) Consider the given aggragate consumption schedule. Income Consumption Savin

Question

Q19) Consider the given aggragate consumption schedule. Income                  Consumption              Savings 600                             600                           0 700                              660                           40 800                              720                           80 900                              780                          120 Comment on the MPC, MPS, APC, and APS in this situation. Q19) Consider the given aggragate consumption schedule. Income                  Consumption              Savings 600                             600                           0 700                              660                           40 800                              720                           80 900                              780                          120 Comment on the MPC, MPS, APC, and APS in this situation.

Explanation / Answer

MPC=change in consumption/change in income : MPC=660-600/700-600=60/100= .6 MPC=.6 on entire chart..... :
MPS+MPC=1 : MPS=change in savings /change income or=1-MPC= .4 : : APC=consumption /income 1)600/600=1 2)660/700= .94 3)720/800= .9 4)780/900= .87 :
APC + APS = 1-----> APS is 1) 0                                                     2) .06                                                    3) .1                                                     4) .13

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