The Table Given Below Shows the Values of Different Components

question 30

Multiple Choice

The table given below shows the values of different components of aggregate expenditure of an economy. The marginal propensity to save (MPS) equals _____. 

• A) 0.80 or 4/5
• B) 0.60 or 3/5
• C) 0.40 or 2/5
• D) 0.10 or 1/10
• E) 0.20 or 1/5

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Definitions:

Money Supply

The aggregate financial resources present in an economy at a given time, which include currency, coinage, and the deposits in both current and savings accounts.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary depending on income level, type of good, or service.

Government Spending

Government Spending encompasses all expenditure by government bodies and agencies, including investments, public services, and defense spending.

Aggregate Supply Curve

An illustrative depiction that exhibits the connection between total economic output and the general price level.