Suppose that disposable income, consumption, and saving in some country are $200 billion, $150 billion, and $50 billion, respectively. Next, assume that disposable income increases by $20 billion, consumption rises by $16 billion, and saving goes up by $4 billion. a. What is the economy's MPC? What is its MPS? b. What was the APC before the increase in disposable income? c. What was the APC after the increase?

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Question:

Suppose that disposable income, consumption, and saving in some country are $200 billion, $150 billion, and $50 billion, respectively. Next, assume that disposable income increases by $20 billion, consumption rises by $16 billion, and saving goes up by $4 billion.
a. What is the economy's MPC? What is its MPS?
b. What was the APC before the increase in disposable income?
c. What was the APC after the increase?

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