If the Marginal Propensity to Save Is 0

question 12

Multiple Choice

If the marginal propensity to save is 0.25, personal disposable income is £200 and autonomous consumption is £15, what is the level of consumption?

• A) £150
• B) £165
• C) £50
• D) £65

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Definitions:

Annual Investment

The amount of money that is invested or planned to be invested over the course of a year.

Investments

The action or process of investing money for profit, including assets such as stocks, bonds, real estate, or commodities.

Compounded Annually

Interest calculation method where the interest is added to the principal at the end of each year, affecting the next year's interest.

Initial Payment

The first payment made in a series of payments for the purchase of an item or service.