Suppose a Certain Economy's Consumption Function Is , Where

question 133

Short Answer

Suppose a certain economy's consumption function is , where and are measured in billions of dollars.Find the marginal propensity to consume (the rate of change of consumption with respect to income, ) when .
Round the answer to two decimal places, if necessary.
$__________ billion/billion dollars

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Definitions:

Federal Budget Deficit

The financial situation where the federal government's expenditures exceed its revenues within a given fiscal year.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Budget Deficit

The financial situation where a government's expenditures exceed its revenues within a specific period, leading to borrowing or debt accumulation.

Tax Revenues

Represents the income that is gained by governments through taxation.