If the Marginal Propensity to Save Is 0

question 16

Multiple Choice

If the marginal propensity to save is 0.25 and income increases by $7,540, what is the increase in consumption?

• A) $5,655
• B) $1,885
• C) $10,053
• D) $30,160

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Definitions:

Formal-Operations

A stage in Piaget's theory of cognitive development, typically beginning around age 12, where individuals start to use abstract and logical thinking.

Concrete-Operations

A stage in Piaget's theory of cognitive development where children gain the ability to think logically about concrete events.

Preoperational Child

Refers to the stage in Piaget’s theory of cognitive development (ages 2-7) where children begin to use language and think symbolically, but their thinking is still intuitive and egocentric.

Conservation

The principle of saving natural resources to prevent depletion and harm to the environment.