This topic contains a solution. Click here to go to the answer

Author Question: What are the marginal propensity to consume (MPC) and the marginal propensity to save (MPS)? How is ... (Read 80 times)

xclash

  • Hero Member
  • *****
  • Posts: 681
What are the marginal propensity to consume (MPC) and the marginal propensity to save (MPS)? How is the MPC related to the consumption function?

Question 2

Are we passing the national debt burden on to our children?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Pamela.irrgang@yahoo.com

  • Sr. Member
  • ****
  • Posts: 323
Answer to Question 1

The marginal propensity to consume is the change in consumption divided by the change in disposable income. The marginal propensity to save is the change in saving divided by the change in disposable income. The MPC measures the slope of the consumption function and is constant along a linear consumption function.

Answer to Question 2

One side of this argument is that the debt is mostly internal, so financing the debt only involves exchanging old bonds for new bonds among U.S. citizens. The burden of the debt falls only on the current generation when the trade-off between public-sector goods and private-sector goods along the production possibilities curve occurs. The counter-argument is that there is a sizable external debt that transfers purchasing power to foreigners.




xclash

  • Member
  • Posts: 681
Reply 2 on: Jun 30, 2018
Wow, this really help


ktidd

  • Member
  • Posts: 319
Reply 3 on: Yesterday
:D TYSM

 

Did you know?

Your chance of developing a kidney stone is 1 in 10. In recent years, approximately 3.7 million people in the United States were diagnosed with a kidney disease.

Did you know?

The horizontal fraction bar was introduced by the Arabs.

Did you know?

Patients who have been on total parenteral nutrition for more than a few days may need to have foods gradually reintroduced to give the digestive tract time to start working again.

Did you know?

No drugs are available to relieve parathyroid disease. Parathyroid disease is caused by a parathyroid tumor, and it needs to be removed by surgery.

Did you know?

Eating carrots will improve your eyesight. Carrots are high in vitamin A (retinol), which is essential for good vision. It can also be found in milk, cheese, egg yolks, and liver.

For a complete list of videos, visit our video library