The Marginal Propensity to Save Out of a Temporary Change

question 48

Multiple Choice

The marginal propensity to save out of a temporary change in income is approximately:

• A)1
• B)0.5
• C)0
• D)none of the above.

---

Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision. It represents the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Budget Constraint

The limit on the consumption bundles that a consumer can afford given their income and the prices of goods and services.

Gardenburger

A brand of vegetarian burgers made from a variety of vegetables and grains.

Monthly Income

The total amount of earnings or revenue generated by an individual or entity in a month, typically from employment, business activities, or investments.