Suppose When Disposable Personal Income Increases from $10,000 to $15,000

question 219

Multiple Choice

Suppose when disposable personal income increases from $10,000 to $15,000, consumption increases from $9,000 to $13,000. What is the marginal propensity to save?

• A) 0.2
• B) 0.4
• C) 0.6
• D) 0.8

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Definitions:

Cochlea

A spiral-shaped, fluid-filled inner ear structure responsible for converting sound waves into electrical signals the brain can understand.

Eardrum

A delicate film that divides the external ear from the inner ear and oscillates as a reaction to audio vibrations.

Auditory Canal

A tube-like structure that leads from the outer ear to the eardrum, enabling sound waves to reach the eardrum and be processed by the auditory system.

Hair Cells

Specialized auditory receptor neurons found within the inner ear, playing a critical role in the conversion of sound vibrations into electrical signals for the brain to interpret.