Does I, G and T affect on MPC?

[hogar315]

Hello guys,
I got one problem. I can not find on the Internet if G, I and T affect on marginal propensity to consume and saving.

What is marginal propensity to consume and saving if we got that:
C=40+0.5Yd
T=400
I=200
G=600

This is my work:



I don't know if I solve this in the right way... And now...MPC should be: MPC=C/Y--> 1200/2000 = 0.6? Or MPC does not change even if we got G, I and T in the task. Then MPC should be == 0.5

Could you please help me with that?
Please!
Thank you very much.

[famous_blue_raincoat]

The formula you mentioned for calculating MPC is actually delta(C)/delta(Y), applicable in cases where income and consumption have changed.

Since there is no such change in the case mentioned here, MPC is 0.5 and consequently MPS is 0.5 as well.

[hogar315]

famous_blue_raincoat wrote

The formula you mentioned for calculating MPC is actually delta(C)/delta(Y), applicable in cases where income and consumption have changed.

Since there is no such change in the case mentioned here, MPC is 0.5 and consequently MPS is 0.5 as well.

Thank you!