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:

Explanation

The act of making something clear or understandable by describing or presenting it in detail.

Substitution

In chemistry, a reaction where one atom or a group of atoms in a molecule is replaced by another atom or group of atoms.

Elimination

A chemical reaction in which two atoms or groups are removed from a molecule, typically resulting in the formation of a double bond.

Organic Product

A substance that has been derived from living matter, or chemically synthesized to mimic compounds produced by living organisms.