Marginal Propensity to Save
Assume that consumption spending is $16,000. For every $200 increase in disposable income, savings increase by $20. Which of the following statements is true?
A
The marginal propensity to save is .20.
B
The marginal propensity to consume is .20.
C
The marginal propensity to consume is .10.
D
The marginal propensity to save is .10.
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