The Marginal Propensity to Save

question 42

Multiple Choice

The marginal propensity to save:

• A) is the change in consumer savings divided by the change in consumption.
• B) is the change in savings divided by the change in disposable income.
• C) equals MPC + 1.
• D) changes when the marginal propensity to consume is constant.

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Definitions:

Ratified

Ratification refers to the formal approval or confirmation of an agreement or treaty, often after the act has been signed or provisionally applied.

Lease

A contractual agreement where one party, the lessor, grants the other party, the lessee, the right to use a property or asset for a specified period in exchange for rental payments.

Preference Shares

Shares of a company's stock with dividends that are paid out to shareholders before common stock dividends are issued.

Common Shares

Equity securities that represent ownership in a corporation, providing voting rights and a share in the company's profits through dividends.