If the Marginal Propensity to Save (MPS) Is 0

question 235

Multiple Choice

If the marginal propensity to save (MPS) is 0.25, the multiplier will be

• A) 0.75.
• B) 2.5.
• C) 4.
• D) 40.

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Definitions:

Universal Life Insurance

A type of insurance policy that is flexible and allows one to raise or reduce premiums and the amount of coverage on one’s life.

Term Life Insurance

A type of insurance policy covering the insured for a fixed period of time (e.g., 10 or 20 years). Premiums are usually lower for a greater amount of coverage than with other types of life insurance.

Whole Life Insurance

A type of insurance policy with which, for a set annual premium, one receives life insurance coverage and, at the same time, invests one’s money.

Premiums

A designated amount of money paid at regular intervals by an individual or entity for a policy or service, especially in the context of insurance.