Answer to Question #48584 in Other Economics for Shione
The slope of the economy's aggregate expenditures schedule will be 0.8, as AE = mpc*Y + I.
The marginal propensity to consume (MPC) is a metric that quantifies induced consumption, the concept that the increase in personal consumer spending (consumption) occurs with an increase in disposable income (income after taxes and transfers). The proportion of disposable income which individuals spend on consumption is known as propensity to consume. MPC is the proportion of additional income that an individual consumes.
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