Use Table: Income and Consumption Spending. The table depicts the total income of an economy and the consumption spending at each income level. Given this information, what is the marginal propensity to consume and save for the economy? Further, assuming that there are no leakages in the economy except saving, by how much would total spending in the economy increase if government spending in the economy increases by $500? Finally, how would your answer to the second part change if there was an additional leakage in the form of taxes?

Question

Use Table: Income and Consumption Spending. The table depicts the total income of an economy and the consumption spending at each income level. Given this information, what is the marginal propensity to consume and save for the economy? Further, assuming that there are no leakages in the economy except saving, by how much would total spending in the economy increase if government spending in the economy increases by $500? Finally, how would your answer to the second part change if there was an additional leakage in the form of taxes?
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Quizplus · Accepted Answer

The Answer of Use Table: Income and Consumption Spending. The table depicts the total income of an economy and the consumption spending at each income level. Given this information, what is the marginal propensity to consume and save for the economy? Further, assuming that there are no leakages in the economy except saving, by how much would total spending in the economy increase if government spending in the economy increases by $500? Finally, how would your answer to the second part change if there was an additional leakage in the form of taxes?
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