If the Marginal Propensity to Save Is 0

question 227

Multiple Choice

If the marginal propensity to save is 0.25,then a $10,000 decrease in disposable income will

• A)increase consumption by $7,500.
• B)increase consumption by $2,500.
• C)decrease consumption by $7,500.
• D)decrease consumption by $2,500.

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Definitions:

Superior

Someone or something that is higher in rank, quality, or importance than others.

Traits

Characteristic patterns of thought, emotion, and behavior that are relatively stable over time and across situations, distinguishing one person from another.

Social Allergy Effect

A phenomenon where repeated exposure to a small irritating behavior in a close relationship leads to an increasingly larger annoyance or distress.

Annoyed

Feeling bothered, irritated, or displeased.