(Answered) What does C=100+0.9Y tell us. C is consumption, Y is dispposable incomeWhat does C=100+0.9Y tell…

➤ How do you interpret the 0.9 number and what does it imply?
The 0.9 is the marginal propensity to consume (MPC). It means households spend 90% of any additional disposable income and save the remaining 10%. A high MPC increases short-run aggregate demand responsiveness and reduces the marginal propensity to save, which matters for fiscal policy effectiveness.