Question

If the MPC is 0.60 and disposable income decreases from $11,000 billion to $10,000 billion, savings will decrease by

Answer 1

the decrease in the savings is $600 billion

Step-by-step explanation:

The computation of the decrease in the savings is shown below;

The difference in the income is

= $11,000 billion - $10,000 billion

= $1,000 billion

Now the decrease in the savings is

= 0.60 × $1,000 billion

= $600 billion

Hence the decrease in the savings is $600 billion

The same is to be considered and relevant