ECON 104 : Chapter 8 Review
Document Summary
Mcbr chapter 8 review questions: complete the following table assuming that (a) mps = 1/5, (b) there is no government and all saving is personal saving. Answer: a. apc = 0. 75. b. mps = 0. 4; mpc = 0. 6. c. apc fell to 0. 72. Level of output (gdp = di) consumption saving apc aps mpc mps and income. 35 dissave at very low income levels: if the proportion of total income consumed decreases and the proportion saved increases as income rises, explain how the mpc and mps can be constant at various levels of income. Level of output and income (gdp = di) 0. 8: the break-even level of income is 125 where saving equals zero. Households dissave by borrowing or by dipping into accumulated savings: the mpc and mps represent the slopes of the consumption and savings schedules, respectively. The fact that mpc and mps are constant means that the schedules will be straight-line graphs.
