If the Marginal Propensity to Save (MPS) Increased from 0

question 363

Multiple Choice

If the marginal propensity to save (MPS) increased from 0.3 to 0.4, this would cause the multiplier effect to

• A) decrease.
• B) increase.
• C) stay the same.
• D) None of the above is correct.

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Definitions:

Money

A medium of exchange in the form of coins and banknotes; used to purchase goods and services or measure value and wealth.

Revenue

The income that a business earns from its normal business activities, usually from the sale of goods and services to customers.

Income

Money received, especially on a regular basis, for work or through investments.

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Physical items that are produced for sale or use, ranging from commodities and raw materials to finished products.