In our simple macro model with government and foreign trade,the marginal propensity to consume out of disposable income is ________ whereas the marginal propensity to consume out of national income is ________.
A)MPC; MPC(1 - t)
B)MPC(1 - t); MPC
C)MPC(1 - t)- m; MPC(1 - t)
D)MPC; MPC(1 - t)- m
E)MPC(1 - t); MPC(1 - t)- m

Question

Quizplus · Accepted Answer

MPC is the marginal propensity to consume out of disposable income, and MPC(1 - t) is the marginal propensity to consume out of national income.

In Our Simple Macro Model with Government and Foreign Trade,the