The Marginal Propensity to Save Refers to the

question 14

Multiple Choice

The marginal propensity to save refers to the

• A)total saving divided by a change in income.
• B)additional saving that occurs out of an additional dollar of income.
• C)additional saving that occurs over time.
• D)additional saving that occurs out of an additional dollar of investment.
• E)change in saving divided by total income.

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Definitions:

Financial Option

A contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price.

Fixed Price

An agreed upon price for goods and services that remains constant, unaffected by the fluctuations in the market or resource costs.

Risk Averse

A description of an investor's preference for lower risk, opting for surety over a gamble with potentially higher returns but higher uncertainty.

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business, critical for daily operations, taxes, purchasing inventory, and paying employees.