If the marginal propensity to save for an economy is 0.2, then the marginal propensity to consume for the economy is:
A) 0.5.
B) 0.6.
C) 0.7.
D) 0.8.

Name: If the marginal propensity to save for an economy is 0.2, then the marginal propensity to consume for the economy is: A) 0.5. B) 0.6. C) 0.7. D) 0.8.
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Question

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is calculated as 1 minus the marginal propensity to save (MPS). Therefore, if MPS is 0.2, MPC = 1 - 0.2 = 0.8.

If the Marginal Propensity to Save for an Economy Is