If the Marginal Propensity to Save Is 0

question 41

Multiple Choice

If the marginal propensity to save is 0.4,then a $2 million increase in disposable income will

• A)increase consumption by $5 million.
• B)increase consumption by $1.2 million.
• C)decrease consumption by $5 million.
• D)decrease consumption by $1.2 million.

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Definitions:

Highly Individualistic

Describes persons or societies that prioritize independence and self-expression over collective goals or community values.

Long-term Cultures

Societal or organizational cultures that prioritize and value long-term commitments, perseverance, and sustainability over short-term gains.

Honeymoon

A period of harmony and happiness following the commencement of a new project, job, or phase in life, often characterized by optimistic and positive feelings.

Irritation/Anger

Emotional responses typically characterized by annoyance or frustration, which can escalate to anger if not managed.