The collective market capitalization of stock in American companies increased from $34 trillion at the end of 2019 to $41 trillion at the end of 2020. Not all of the stock is owned by American consumers but for this problem pretend that it is. If the marginal propensity to consume stock wealth is 0.01 then how much would we expect consumption spending to increase due to the increase in the stock wealth? $ billion
The collective market capitalization of stock in American companies increased from $34 trillion at the end of 2019 to $41 trillion at the end of 2020. Not all of the stock is owned by American consumers but for this problem pretend that it is. If the marginal propensity to consume stock wealth is 0.01 then how much would we expect consumption spending to increase due to the increase in the stock wealth? $ billion
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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