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If Consumption Is Defined as C = 2,000 + 0

question 14

True/False

If consumption is defined as C = 2,000 + 0.8Y,then the marginal propensity to save is 0.8.


Definitions:

Market Interest Rate

The prevailing rate of interest charged on loans and bonds in the financial markets.

Incremental Borrowing Rate

This is the interest rate a company would have to pay if it borrows additional funds.

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