Suppose measures an economy's personal consumption expenditure and x the personal income, both in billions of dollars.Then,
measures the economy's savings corresponding to an income of x billion dollars.Then
. The quantity dS/dx is called the marginal propensity to save.
For the consumption function , where
and x are measured in billions of dollars, find the marginal propensity to save when
.
A)
B)
C)
D)
Correct Answer:
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