The disposable income increases from $250 to $300 and saving increases from $40 to $50, 0.167 is the average propensity to save.
Because the marginal propensity to consume refers to the percentage change in consumption for every one rupee of change in the income. The only two leakages are saving and taxation and the two injections are investment and government spending.
Consumption is the act of using resources to satisfy current needs and wants.
Taxation is used primarily to raise revenue for government expenditures, though it can serve other purposes as well.
spending is the total money spent on final goods and services by individuals and households for personal use and enjoyment in an economy.
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