Question

Recommendations to the MPC to keep the CPI within the target range(8)

Answer 1

Explanation:

When there is an increase in the income, and there is not any much change in the market, then to keep the target of the CPI same, what is needed is to halt the increase of consumption, due to raising of income.

Explanation:

MPC stands for Marginal Propensity to Consume whereas CPI stands for the Consumer Price Index. MPC shows the change in the income of people, which gets consumed due to the simultaneous increase in the price of the product. CPI is the weighted average of the cost of goods one purchases.