The Smaller the Marginal Propensity to Save,other Things Constant,_____

question 146

Multiple Choice

The smaller the marginal propensity to save,other things constant,_____.

• A)the smaller the marginal propensity to consume
• B)the larger the multiplier
• C)the smaller the multiplier
• D)the flatter the consumption function
• E)the steeper the saving function

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Definitions:

Risky Securities

Financial instruments carrying a higher potential for loss, often offering greater potential returns to compensate for the increased risk.

Portfolio Variance

A measure of the dispersion of returns of a portfolio, calculated as the weighted average of the covariance of each asset in the portfolio.

Coefficient of Correlation

A statistical measure that indicates the degree to which two variables move in relation to each other, ranging from -1 to 1.