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a. Suppose that, if their income rises by $100, all households in Normalia raise their spending by $90. Instructions: Round your answers to one decimal place. The MPC in Normalia is: MPS in Normalia is: b. Suppose that the MPC in South Pangea is 0.7. Instructions: Enter your answer as a whole number. If a South Pangean household earns an extra $100, by how much will they increase their spending?

Respuesta :

Answer:

62 dollars

Explanation:

100-38=62

Cbuhg

Answer:

The MPC (Marginal Propensity to Consume) in Normalia = 0.9

The MPS (Marginal Propensity to Save) in Normalia = 0.1

A South Pangean household will increase their spending by $70

Explanation:

In Normalia if income increases by $100 and all households increase their spending by $90 that would mean for every $100 they earn they will spend (consume) $90 = 0.9. Which means they have $10 left so they save 10% leaving their MPS to be 0.1. For the households in South Pangea if they have a MPC of 0.7 that means if they have $100 they will spend $70.

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