Advanced Placement (AP), 04.05.2021 22:20 alliemeade1
1) Derrick gets a salary increase from $62,500 to $67,500. Over the following year, he spends $3,500 more than he did the previous year. Based on this data calculate the following values. Show your work and write out any formulas you use.
a) What is Derrick’s Marginal Propensity to Consume (MPC)? (2 points)
b) What is the value of Derrick’s spending multiplier based on your answer to part A? (2 points)
Answers: 1
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1) Derrick gets a salary increase from $62,500 to $67,500. Over the following year, he spends $3,500...
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