If the Marginal Propensity to Save Is 0

question 204

Multiple Choice

If the marginal propensity to save is 0.4 and disposable income increases from $1,000 to $1,500, saving will increase

• A)$100.
• B)$200.
• C)$300.
• D)$400.

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Definitions:

Fair Value

The price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants.

Equity Securities

Financial instruments indicating ownership in a company, such as stocks, which may offer dividends and voting rights.

Strategic Investments

Strategic Investments are long-term investments made by a company in other companies or assets to further its business objectives and gain competitive advantages.

Trading Investments

Securities that a company buys and holds primarily for the purpose of selling them in the near term to generate income.