Suppose that disposable income, consumption, and saving in some country are $800 billion, $700 billion, and $100 billion, respectively. next, assume that disposable income increases by $80 billion, consumption rises by $56 billion, and saving goes up by $24 billion. what is the economys mpc? its mps?

instructions: round your answers to one decimal place.

mpc =

mps =

what was the apc before the increase in disposable income? after the increase?

instructions: round your answer to two decimal places.

apc before the increase in disposable income =

instructions: round your answer to three decimal places.

apc after the increase in disposable income =

MPC = 0.7

MPS = 0.3

APC before the increase in disposable income = 0.875

APC after the increase in disposable income = 0.859

Explanation:

Given that,

Disposable income = $800 billion

Consumption = $700 billion

Savings = $100 billion

Further,

Disposable income increases by $80 billion

Consumption rises by $56 billion

Saving goes up by $24 billion

Therefore,

Marginal propensity to consume(MPC):

= Change in consumption level ÷ Change in disposable income

= $56 billion ÷ $80 billion

= 0.7

So, Marginal propensity to save = 1 - MPC

                                                      = 1 - 0.7

                                                      = 0.3

Average propensity to consume(Before increase in disposable income):

= Consumption ÷ Disposable income

= $700 billion ÷ $800 billion

= 0.875

Average propensity to consume(After increase in disposable income):

= Consumption ÷ Disposable income

= ($700 + $56) billion ÷ ($800 + $80) billion

= $756 billion ÷ $880

= 0.859

the law, public safety, corrections, and security cluster prepares people for careers in planning, managing, and providing legal, public safety, protective services and homeland security, including professional and technical support services.