Alice's disposable income increases by $1,000, and she spends $600 of it. Assuming no taxes, Alice's: marginal propensity to save is 0.4 and she saves $400. marginal propensity to save is 0.4 and she saves $600. MPC is 0.4 and she saves $400. MPC is 0.6 and she consumes $400.
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