With the formula of consumption function determine MPC

Answer 1

The formula for the consumption function is:

C = a + MPC * Y

Where:
C = consumption
a = autonomous consumption
MPC = marginal propensity to consume
Y = income

To determine MPC, we can rewrite the formula as:

MPC = (C - a) / Y

Where:
MPC = marginal propensity to consume
C = consumption
a = autonomous consumption
Y = income

By calculating the change in consumption (C) minus autonomous consumption (a) divided by the change in income (Y), we can determine the marginal propensity to consume (MPC).