CONSUMPTION, SAVINGS, AND INVESTMENTS
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Last updated 6:46 AM on 12/9/22
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4 Terms
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CONSUMPTION FUNCTION
relationship between consumer spending and the various factors determining it
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Marginal Propensity to Consume (MPC)
amount by which consumption increases when disposable income increases by one unit
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0-1
MPC is between
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If MPC is 0.8 then households spend 80 cents of each additional peso of disposable income on consumer goods & services and 20 cents
Note 
Flashcards (64)