The MPC is 0.75 if autonomous consumption spending rises by $25 million and raises equilibrium real GDP by $100 million. Net exports will decrease as the price level rises.
The amount individuals spend on durables, non-durables, and services is referred to as consumption spending. Consumption has an impact on the economy's total aggregate demand, and individuals consume even when they have no income. This is due to the fact that consumption is essential to survival.
Services like real estate and health care account for almost two thirds of consumer spending. Financial services like banking, investing, and insurance are examples of other services. Services from nonprofits, as well as cable and internet services, are included.
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