October 2012, Qu 14 (amended)

Discussion in 'CT7' started by Maria Do, Sep 25, 2018.

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  1. Maria Do

    Maria Do Member

    Can someone help me with the solution to this question:

    In a closed economy with no taxation, the marginal propensity to save is 0.25 and the level of income is £800m. what is the likely level of consumption expenditure resulting from a rise in government expenditure of £100m?
     
  2. Camdown

    Camdown Member

    Yes I would also like to understand the answer to this. :)
     

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