The slope of the saving function equals the
A) marginal propensity to save.
B) average propensity to save.
C) marginal efficiency of saving.
D) expected rate of return.
E) rate of interest.

Question

Quizplus · Accepted Answer

The slope of the saving function represents the change in savings for a unit change in income. This is the definition of the marginal propensity to save (MPS), which measures the proportion of an additional dollar of income that is saved. Therefore, the correct choice is A) marginal propensity to save.

The Slope of the Saving Function Equals the