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7. In a hypothetical aggregate expenditures (AE) model, the marginal propensity to consume is 0.80. Given...

7. In a hypothetical aggregate expenditures (AE) model, the marginal propensity to consume is 0.80. Given this information, what is the slope of the Consumption (C) line in this hypothetical AE model?

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Answer #1

The marginal propensity to consume is same as the slope of he consumption line. So, the value of the MPC would be 0.80.

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