Fraction of total income consumed is defined as ? Question 4 a. Stimulus spending b. Marginal Propensity to Consume (MPC) c. Consumption expenditure d. Average propensity to Consume (APC) If the CPI for 1999 is 210 and the CPI in year 2022 is 630, what was the value of a $2500 in 1999? Question 5 a. $1500 b. $500 c. $800.33 d. $525
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Step 1: Calculate the inflation rate from 1999 to 2022 using the CPI formula: Inflation rate = (CPI in 2022 - CPI in 1999) / CPI in 1999 Inflation rate = (630 - 210) / 210 Inflation rate = 420 / 210 Inflation rate = 2 Show more…
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Choose the correct answer: 1) If consumption is $25,000 when income is $26,000, and consumption increases to $25,900 when income increases to $28,000, the marginal propensity to consume is: (A) 0.59. (B) 0.65. (C) 0.55. (D) 0.45. 2) Suppose consumption is $10,000 when income is $9,000 and the marginal propensity to save equals 0.1. When income increases to $9,500, consumption will be: (A) $8,500. (B) $10,450. (C) $10,500. (D) $10,050.
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