Q23 of 50 Page 1

An economy is in equilibrium. Calculate Marginal Propensity to Consume :

National income = 1000


Autonomous consumption expenditure = 200


Investment expenditure = 100

Y = C +MPC (Y)+1

1000 =200 + MPC (1000) + 1


MPC = 1000-200-100/1000


MPC = 700/1000


MPC = 0.7


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