If Consumption Rises from $500 Billion to $575 Billion and Income

question 210

Multiple Choice

If consumption rises from $500 billion to $575 billion and income rises from $600 billion to $700 billion, the marginal propensity to save is

• A) 0.2.
• B) 0.25.
• C) 0.75.
• D) 1.17.

---

Definitions:

Credit Card

A payment card issued by financial institutions that allows the cardholder to borrow funds for purchases or cash advances, subject to a line of credit.

Loan Issuer

An entity, such as a bank or financial institution, that provides loans to borrowers under agreed terms and conditions.

Debit Cards

A payment card that deducts money directly from a consumer's checking account to pay for a purchase, unlike credit cards which borrow money that must be repaid.

U.S. Mint

A bureau of the Department of the Treasury responsible for producing coinage for the United States.