Consumption function, MPC, MPS and multiplier calculations

What this note covers

1. Disposable income, consumption and saving
2. Calculate MPC and MPS from changes
3. Graph the consumption and saving functions
4. Derive the simple multiplier
5. Explain leakages and qualifications
6. Solve and check a complete worked response

6 sections · 10 key terms & formulas · 6 common mistakes