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Economics

Consumption Function

Consider the following data:

Year Real Disposable Income Real Consumption

0 20,000 14,000

1 30,000 19,000

2 40,000 24,000

For now, assume that no other variable (besides real disposable income) that could affect real Consumption has changed between Year 0, Year 1, and Year 2.

What is the marginal propensity to consume?

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9163861

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