Monday, February 29, 2016

Unit III ( Marginal Propensity to Consume)

-The fraction of any change in disposable income that is consumed.
-MPC = Change in Consumption / Change in Disposable Income
-MPC = Change in Savings / Change in Disposable Income

  • Marginal Propensities:
  • MPC + MPS = 1
  • .: MPC = 1 - MPC
  • .: MPS = 1 - MPC
  • Remember that people do two things with their disposable income, consume it or save it

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1 comment:

  1. UnknownMarch 4, 2016 at 5:25 AM

    I really love the videos you put with your notes they help understand the topic

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