The following table is a consumption schedule. Assume that taxes and transfer payments are zero and that all saving is personal saving.
(GDP = DI) C S APC APS
1500 $1540 $_______ 1.027 -.027
1600 1620 _______ 1.013 -.013
1700 1700 _______ _____ _____
1800 1780 _______ .989 .011
1900 1860 _______ .979 .021
2000 1940 _______ _____ _____
2100 2020 _______ .962 .038
2200 2100 _______ _____ _____
Compute saving at each level of disposable income and the missing average propensities to consume and to save.
What is the break-even level of disposable income?
What is the MPC, the MPS?
What is the value of the multiplier in this example? What does it represent? How can it be used?