Other Things Constant, How Would a Smaller Marginal Propensity to Save

question 119

Multiple Choice

Other things constant, how would a smaller marginal propensity to save affect the marginal propensity to consume?  

• A) The marginal propensity to consume would become smaller. 
• B) The marginal propensity to consume would become larger. 
• C) The marginal propensity to consume would remain the same. 
• D) The marginal propensity to consume would be negative.

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Definitions:

Bottlenecks

Points of congestion or blockage in a production process or system that lead to inefficiencies and delays.

Major Business Projects

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Prospect Theory

A theory in behavioral economics that evaluates how people choose between probabilistic alternatives that involve risk, where the probable outcomes are known.

Diminishing Marginal Utility

The principle that as a consumer increases the consumption of a good or service, the marginal utility obtained from each additional unit of the good or service decreases.