If Consumption Increases from $500 Billion to $575 Billion and Income

question 270

Multiple Choice

If consumption increases from $500 billion to $575 billion and income increases from $600 billion to $700 billion, the marginal propensity to save is:

• A) 0.2.
• B) 0.25.
• C) 0.75.
• D) There is not enough information to answer this question.

---

Definitions:

Primary Circular Reaction

A developmental phase identified by Jean Piaget, involving repetitive actions centered on the infant's own body, typically seen as a form of early learning.

Refusing

The act of denying or rejecting a proposal, request, or command.

Laughing

An involuntary response to certain external or internal stimuli, often associated with amusement, joy, or relief.

Internalization of Schemes

The process by which children absorb and integrate new information and experiences into their existing cognitive structures or schemas.