Ask Question
25 January, 05:10

The Patel family has a disposable income of $90,000 annually. Assume that their marginal propensity to consume is 0.8 (the Patel family spends 80% of new disposable income on consumption) and that their autonomous consumption spending is equal to $10,000. What is the amount of the Patel family/'s annual consumer spending?

+2
Answers (1)
  1. 25 January, 05:22
    0
    To get the annual spending of Patel family, we will need to add the amount of consumption according to their marginal propensity to consume and their autonomous consumption spending. with the formula

    Consumption = Autonomous consumption + (Disposable incomeXmarginal propensity)

    Where

    Autonomous consumption = $10000

    Disposable income = $90000

    margina propensity = 80%

    substitute all given value to get the consumption

    Consumption = $82,000

    Patel family annual consumer spending is $82000.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The Patel family has a disposable income of $90,000 annually. Assume that their marginal propensity to consume is 0.8 (the Patel family ...” in 📘 Mathematics if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers