Why do rich people have a higher marginal propensity


Discussion:

1. Why do rich people have a higher marginal propensity to save than poor people?

2. How do households dissave? Where do they get the money to finance their extra consumption? Can everyone dissave at the same time?

3. How might a "perfect" macro equilibrium (Figure 9.10a) be affected by (a) a stock market crash; (b) the death of a president; (c) a recession in Canada; (d) a spike in oil prices?

4. How did the decline in U.S. home prices in 2006-8 affect aggregate demand?

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Microeconomics: Why do rich people have a higher marginal propensity
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