Part I - Mercat de béns i multiplicador · Introducció a la Macroeconomia UPF 2021

c. Let private consumption be given by $C = c_0 + c_1(Y - T)$. As vaccination spreads and consumer confidence recovers, assume the marginal propensity to consume $c_1$ increases. Consequently:

Solución: 3. Aggregate consumption will become more responsive (react more strongly) to shifts in aggregate income.