C = 2,550 + (mpc)y
I = 800
G = 1,100
NX = 50
If the equilibrium level of GDP is $11,250, using the equations for C, I, G, and NX shown above, find the value of the marginal propensity to consume.
What will be an ideal response?
Y = C + I + G + NX.
11,250 = 2,550 + (MPC)11,250 + 800 + 1,100 + 50.
11,250 = 4,500 + (MPC)11,250.
6,750 = (MPC)11,250.
0.6 = MPC.
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