If Disposable Income Rises by $100 Billion and Personal Consumption

question 17

Multiple Choice

If disposable income rises by $100 billion and personal consumption expenditure rises by $60 billion,what is the marginal propensity to save?

• A) 0.60
• B) 0.40
• C) -0.40
• D) -1.50
• E) impossible to calculate from these figures

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Definitions:

Psychodynamic

Referring to a psychological approach that emphasizes the systematic study of the psychological forces that underlie human behavior, feelings, and emotions and how they might relate to early experience.

Conversion Disorder

A mental condition where a person experiences physical symptoms that are not explainable by medical conditions, believed to arise from psychological conflicts.

Reinforcement

In behavioral psychology, a process that strengthens a particular behavior by providing a consequence an individual finds rewarding.

Pleasurable Outcomes

Positive results or effects that are enjoyable or satisfying.