Q1. If consumption increases by $12 billion when real disposable income increases by $15 billion, illustrate what is the value of the MPC? Illustrate what is the relationship between the MPC and the MPS? If the MPC increases, illustrate what must happen to the MPS? Explain how is the MPC related to the consumption function? Explain how is the MPS related to the saving function?
Q2. Contrast two or three key economic factors for your countryside by means of U.S. economy and comment. For example, if per capita GDP is significantly lower in your country than in the United States, Illustrate what might this imply?