Will MPC plus MPS always equal one? Explain why or why not
Yes, MPC plus MPS will always equal one. The reason is that there are only two things that an individual can do with income spend it or save it. As such, for each dollar of additional income, a certain percentage will be used for consumption and the remaining percentage will be devoted to saving.
Economics
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The difference between the buy at and the sell at price is caused by:
a. market friction. b. transaction cost. c. menu cost. d. market friction and transaction cost.
Economics
Sharmila has a budget line for DVDs and books. DVDs are on the vertical axis and books on the horizontal. Her budget line becomes steeper as
A) the price of a DVD falls. B) the price of a DVD rises. C) her income decreases. D) her income increases.
Economics