Macroeconomics 12th Edition by Michael Parkin

Exercise 1

In an economy, when income increases from $400 billion to $500 billion, consumption expenditure changes from $420 billion to $500 billion. Calculate the marginal propensity to consume, the change in saving, and the marginal propensity to save. Use the following figure to work Problems The figure illustrates the components of aggregate planned expenditure on Turtle Island. Turtle Island has no imports or exports, no incomes taxes, and the price level is fixed.