Answer to Question #57076 in Finance for Shamsudeen AbdulRahman
MPC = 1 - MPS = 0.75,
MPC = (C2 - C1)/(I2 - I1),
The decrease in consumption will be (C2 - C1) = MPC*(I2 - I1) = 0.75*15,000 = $11,250.
So, the right answer is c. $11,250.
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