The figure given below represents the macroeconomic equilibrium in the aggregate income and aggregate expenditure framework. Assume that MPI is equal to zero.
Figure 10.4
In the figure:
C: Consumption
I1 and I2: Investment
G: Government Spending
X: Exports
-In Figure 10.4, calculate the marginal propensity to consume.
A) 0.67
B) 0.50
C) 0.25
D) 0.33
E) 4
Correct Answer:
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