Suppose an Individual's Marginal Propensity to Save Is 0

question 100

Multiple Choice

Suppose an individual's marginal propensity to save is 0.8. If his income increases by £400, by how much will his savings increase?

• A) £32
• B) £80
• C) £8
• D) £320

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Definitions:

Regression

A defense mechanism leading an individual to revert to a less mature state of mental development in response to stress or conflict.

Repression

A defense mechanism where distressing thoughts, memories, or impulses are excluded from conscious awareness.

Reaction Formation

Reaction formation is a defensive process wherein unacceptable emotions or impulses are turned into their opposites to avoid conscious recognition.

Sublimation

A psychological defense mechanism where socially unacceptable impulses or idealizations are transformed into socially acceptable actions or behavior.