The increase in aggregate planned expenditures divided by the change in national income that brought it about is called the
A)marginal propensity to save.
B)average propensity to consume.
C)total propensity to save.
D)average propensity to save.
E)marginal propensity to spend.

Question

Quizplus · Accepted Answer

The definition provided in the question refers to the marginal propensity to spend, which is the change in spending for a given change in income. Therefore, the correct choice is (E) marginal propensity to spend. The other answer choices do not match the definition provided.

The Increase in Aggregate Planned Expenditures Divided by the Change