Suppose that John allocates $10,000 of his disposable income for necessities. Any additional income beyond that is both spent and saved. Assume he has a disposable annual income of $50,000 and an MPC=0.8. Based on this information the additional amount spent on non-necessities should be:

A. $10,000.
B. $40,000.
C. $35,000.
D. $32,000.


Answer: D

Economics

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