Question

Given:

C= 400+cYd

T=50+.10Y

I=10

G=23

Ye=736.36

The marginal prosperity to consume is

Answer 1

Y=C+I+G

C=Y-I-G

C=736.36-10-23=703.36

C=400+cYd=400+c(Y-T)

$T=50+0.10Y=50+0.10\times736.36=123.636$

$C=400+cYd=400+c(Y-T)=400+c(736.36-123.636)=400+612.724c$

703.63=400+c612.724

300.36=c612.724

c=0.4951