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Introductory Econometrics 4th Edition by Jeffrey Wooldridge
Edition 4ISBN: 978-0324660609Introductory Econometrics 4th Edition by Jeffrey Wooldridge
Edition 4ISBN: 978-0324660609 Exercise 18
In the linear consumption function 
the (estimated) marginal propensity to consume (MPC) out of income is simply the slope, J3V while the average propensity to consume (APC) is cons/inc = (ijinc + fiv Using observations for 100 families on annual income and consumption (both measured in dollars), the following equation is obtained:
(i) Interpret the intercept in this equation, and comment on its sign and magnitude.
(ii) What is the predicted consumption when family income is $30,000
(iii) With inc on the x-axis, draw a graph of the estimated MPC and APC.
the (estimated) marginal propensity to consume (MPC) out of income is simply the slope, J3V while the average propensity to consume (APC) is cons/inc = (ijinc + fiv Using observations for 100 families on annual income and consumption (both measured in dollars), the following equation is obtained:
(i) Interpret the intercept in this equation, and comment on its sign and magnitude.
(ii) What is the predicted consumption when family income is $30,000
(iii) With inc on the x-axis, draw a graph of the estimated MPC and APC.
Explanation
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Verified
The estimated least square line is given...
Introductory Econometrics 4th Edition by Jeffrey Wooldridge
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