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Homework answers / question archive / Consider a closed economy in which consumption equals $500 billion when real GDP equals zero, and consumption increases by 75 cents when disposable income increases by $1

Consider a closed economy in which consumption equals $500 billion when real GDP equals zero, and consumption increases by 75 cents when disposable income increases by $1

Economics

Consider a closed economy in which consumption equals $500 billion when real GDP equals zero, and consumption increases by 75 cents when disposable income increases by $1. Investment is constant for all levels of real GDP and equal to $200 billion. In this economy, what is the marginal propensity to save (MPS)?

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