If national income increases from $410 to $430 billion and the marginal propensity to save is 0.25, then savings will increase from $5 to billion.

Question

If national income increases from $410 to $430 billion and the marginal propensity to save is 0.25, then savings will increase from $5 to billion.
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Solution 1

The increase in national income is $430 billion - $410 billion = $20 billion.

The marginal propensity to save (MPS) is the increase in savings divided by the increase in income. In this case, the MPS is 0.25.

So, the increase in savings is MPS * increase in income = 0.25 * $20 billion = $5 billion Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob

Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solv

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