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

question 113

Multiple Choice

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

• A) The smaller the marginal propensity to save, the longer the saving function. 
• B) The smaller the marginal propensity to save, the shorter the saving function. 
• C) The smaller the marginal propensity to save, the flatter the saving function. 
• D) The smaller the marginal propensity to save, the steeper the saving function.

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Definitions:

Supply of Pesos

The total amount of Mexican Pesos available in the financial markets, influenced by factors such as monetary policy and economic conditions.

Exchange Rate

The rate at which one currency can be exchanged for another, influencing international trade and investments.

Flexible Exchange Rates

A monetary system in which the value of the currency is permitted to vary based on the foreign exchange market dynamics.

Dollar Price

The cost of a product or service expressed in terms of the amount of currency needed to purchase it.