C = 3,600 + (mpc)y
I = 1,200
G = 1,400
NX = -200
If the equilibrium level of GDP is $30,000, using the equations for C, I, G, and NX shown above, find the value of the marginal propensity to consume.
What will be an ideal response?
Y = C + I + G + NX.
30,000 = 3,600 + (MPC)30,000 + 1,200 + 1,400 - 200.
30,000 = 6,000 + (MPC)30,000.
24,000 = (MPC)30,000.
0.8 = MPC.
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