00:01
Have some introductory macroeconomic accounting to take care of, right? we are given a measure of income, y, and a measure of consumption, c.
00:07
So we have 100, 200, 300, 400, and 500.
00:14
We then have for consumption, we have 150, 200, 250, 300, 350.
00:22
So for savings, the idea is that savings is equal to the money you take in, your income, minus what you spend, right? so in this case, savings would be minus 50, 0, 50, 100, and 150.
00:39
Our marginal propensity to consume, right, mpc, is the change in consumption over the change in income.
00:50
So if you look here, for example, the income increases by plus 50.
00:56
The consumption increases by plus 100.
00:59
So in all these cases, the marginal propensity to consume is one half, right? one half, one half, one half, always one half.
01:11
And similarly, the marginal propensity to save is the change in savings over the change in income, right? so again, now savings is increasing by plus 50...