Suppose That When Disposable Income Increases by $1,000, Consumption Spending

question 391

Multiple Choice

Suppose that when disposable income increases by $1,000, consumption spending increases by $750. Given this information, we know that the marginal propensity to save (MPS) is

• A) 0.25.
• B) 0.75.
• C) 1.33.
• D) 4.

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Definitions:

Significant Figures

The number of digits in a number that are considered to contribute to the accuracy of that number, reflecting the precision of a measurement.

Significant Figures

The digits in a number that are known with certainty plus the first digit that is uncertain, relevant in scientific measurements.

Length Measurements

The determination of the extent of something from end to end, typically in units such as meters, inches, or miles.

Significant Figures

The number of digits in a value, counting from the first non-zero number, that are used to express the precision of measurements and calculations.