A Reduction in the Marginal Propensity to Save from

question 34

Multiple Choice

A reduction in the marginal propensity to save from .4 to .3 will cause

• A)the ZZ line to become steeper and a given change in autonomous consumption (c0)to have a smaller effect on output.
• B)the ZZ line to become steeper and a given change in autonomous consumption (c0)to have a larger effect on output.
• C)the ZZ line to become flatter and a given change in autonomous consumption (c0)to have a smaller effect on output.
• D)the ZZ line to become flatter and a given change in autonomous consumption (c0)to have a larger effect on output.

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Definitions:

Psychological Research

The scientific study of the human mind, behaviors, and functions using empirical methods and approaches.

Upper-Class

A social group at the top of a societal hierarchy, often holding the most wealth, power, and privilege.

Middle-Class

A social group between the working class and the upper class, often defined by moderate income levels and educational attainment.

Empiricism

A theory that states that knowledge comes only or primarily from sensory experience, emphasizing the role of experience and evidence in the formation of ideas.