If the Marginal Propensity to Save (MPS) Is 0

question 103

Multiple Choice

If the marginal propensity to save (MPS) is 0.50, the value of the spending multiplier is:

• A) 1.
• B) 2.
• C) 4.
• D) 9.

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Definitions:

Decrease

A reduction in quantity, size, or intensity.

Future

The indefinite time period after the present, often considered in the context of possibilities or uncertainties.

Surplus

The amount by which the quantity supplied of a product exceeds the quantity demanded at a specific price.

Excess Demand

A situation in a market where the quantity demanded of a good or service exceeds the quantity supplied at the current price.