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    Question

    For an economy, if C = 400 + 0.8Yd, Yd = Y − T, T =

    300 + 0.2Y , find MPC. 
    A 0.93 Correct Answer Incorrect Answer
    B 0.64 Correct Answer Incorrect Answer
    C 0.81 Correct Answer Incorrect Answer
    D 0.2 Correct Answer Incorrect Answer
    E 0.1 Correct Answer Incorrect Answer

    Solution

    MPC is the slope coefficient of consumption function. C = a + cY.

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