Suppose that disposable income, consumption, and saving in some country are $400 billion, $350 billion, and $50 billion, respectively. Next, assume that disposable income increases by $40 billion, consumption rises by $32 billion, and saving goes up by $8 billion. What is the economy’s MPC? Its MPS?
a) MPC =
b) MPS =
c) APC before the increase in disposable income? =
d) APC after the increase in disposable income? =