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If the marginal propensity to save increases, what happens to the consumption function?
2. If MPC was equal to 0.5, would doubling your income double your consumption spending?
3. Why can’t an economy with an MPC greater than one reach a stable equilibrium in the aggregate expenditure model?
4. Why are unplanned inventory changes the key to predicting future changes in real GDP in the aggregate expenditure model?
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