Answer to Question #65262 in Macroeconomics for Kaylee Deuaye

Question #65262
If disposable income decreases from $6000 to $5000 and MPC equals .80, how much is savings decreased?
1
Expert's answer
2017-02-13T09:21:17-0500
If MPC=0.8, then MPS=1-MPC=0.2 and the disposable income decreased by $6000-$5000=$1000. That`s why the savings decreased by 0.2*$1000=$200.

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