Answer to Question #136132 in Macroeconomics for Mai

Question

1. What, exactly, is the Consumption Function? What information does this concept try to convey to us?

2. What is the meaning of the term "A.P.C.?" What information does this concept try to convey to us?

3. What is the meaning of the term "M.P.C.?" What information does this concept try to convey to us? Why do some economists contend that the M.P.C. measure is "more important" than the A.P.C. measure?

4. Why do richer people tend to save more money than middle income or lower income families? Please list and discuss two reasons.

5 If a family demonstrates an APC of .90 and an MPC of .50, what does this tell us? Does this family's spending and saving pattern do 'more good than harm' to the U.S. economy, in your opinion? Or does it do more harm than good? Why?

Answer 1

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