Understanding Marginal Propensity to Consume (MPC) in Economics
Understanding Marginal Propensity to Consume (MPC) in Economics
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How to Calculate Marginal Propensity to Consume (MPC)
How to Calculate Marginal Propensity to Consume (MPC)
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5 In the linear consumption functioncons = β̂0 β̂1 inc,the (estimated) marginal propensity to consume (MPC) out of income is simply the slope, β̂1, while the average propensity to consume (APC) is cons/inc = β̂0/inc β̂1. Using observations for 100 families on annual income and consumption (both measured in dollars), the following equation is obtained:cons = -124.84 0.853 incn = 100, R^2 = 0.692.(i) Interpret the intercept in this equation, and comment on its sign and magnitude.(ii) What is
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