What Is Consumption Theory? The theory is that if people receive an unanticipated amount of money that increases their disposable income, they will likely spend it and drive up consumption and spending in the economy. Other economists believe that cutting personal income taxes is a better long-term way to drive consumption. What is the concept
How Do You Calculate MPC Given Income And Consumption? The marginal propensity to consume is equal to ΔC / ΔY, where ΔC is the change in consumption, and ΔY is the change in income. If consumption increases by 80 cents for each additional dollar of income, then MPC is equal to 0.8 / 1 =
When Income Equals Consumption Savings Will Be? At all points on the 45° line, income on the vertical axis is equal to income on the horizontal axis. Given the 45° line and the consumption function Where the consumption is equal to income? Break-even point: When consumption expenditure becomes equal to income and there is no