If the Marginal Propensity to Save Is 0

question 109

Multiple Choice

If the marginal propensity to save is 0.1,then a $10 million decrease in disposable income will

• A)increase consumption by $9 million.
• B)increase consumption by $1 million.
• C)decrease consumption by $9 million.
• D)decrease consumption by $1 million.

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Definitions:

Embarrassing Thoughts

Private reflections or ideas that can cause a person to feel shame or embarrassment if revealed.

Developmental Psychology

The scientific study of how and why human beings change over the course of their life, from infancy through childhood, adolescence, adulthood, and aging.

Psychoanalytic Theory

A theory of personality organization and the dynamics of personality development that guides psychoanalysis, developed by Sigmund Freud.

Adolescence

The transitional stage of physical and psychological development that generally occurs during the period from puberty to legal adulthood.