Explain What Effect an Increase in the Marginal Propensity to Save

question 46

Essay

Explain what effect an increase in the marginal propensity to save will have on the slope of the planned aggregate expenditures line and on the size of the multiplier.

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Definitions:

Physical Capital

Tangible assets that are used in the production of other goods or services, such as buildings, machinery, and equipment.

Technological Improvements

Innovations and advancements that enhance productivity, efficiency, and product quality in various industries.

Standard Of Living

The level of wealth, comfort, material goods, and necessities available to a person, group, or country.

Worker-Hour

A unit of measure representing the amount of work accomplished by one worker in one hour.