If the Marginal Propensity to Save Is 1/8,the Value of the Simple

question 24

Multiple Choice

If the marginal propensity to save is 1/8,the value of the simple multiplier is

• A)8
• B)1/8
• C)2
• D)1/2
• E)4

---

Definitions:

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price, typically expressed as a percentage.

Price/earnings Ratio

A valuation metric for companies, calculated as the market value per share divided by the earnings per share.

Excess Cash

Refers to the amount of cash held by a company that exceeds the normal operational needs, often indicating a potential for investment, distribution to shareholders, or acquisition.

Dividend

A part of a company's profits distributed to its shareholders, usually four times a year.