00:01
So here we see two things, right? so first of all, we see that income, which in macro we call y, is going from 40 ,000 to 46 ,000.
00:13
This means that the change in y was equal to 6 ,000.
00:18
We also observe that consumption, which we usually call c, is increasing by plus 4 ,000, right? this is the change in consumption.
00:28
We're not given the level of consumption, just the change in consumption.
00:31
Consumption.
00:32
Now, the mpc, which is the marginal propensity to consume, is by definition, the change in c over the change in y, right? the idea being, when you get more money, how much of it do you spend? so we got 6 ,000.
00:52
We spent 4 ,000 of it on consumption.
00:55
So our marginal propensity to consume is 66 .67 % or 0 .6667.
01:02
Right? we spend two thirds of the additional money that we got.
01:07
The marginal propensity to save, right? it's the margin, right, is equal to one minus the mpc...