Other things constant, how would a smaller marginal propensity to save affect the marginal propensity to consume?
A) The marginal propensity to consume would become smaller.
B) The marginal propensity to consume would become larger.
C) The marginal propensity to consume would remain the same.
D) The marginal propensity to consume would be negative.

Question

Other things constant, how would a smaller marginal propensity to save affect the marginal propensity to consume?  
A) The marginal propensity to consume would become smaller. 
B) The marginal propensity to consume would become larger. 
C) The marginal propensity to consume would remain the same. 
D) The marginal propensity to consume would be negative.

Quizplus · Accepted Answer

A smaller marginal propensity to save means that individuals are less likely to save and more likely to spend, which would increase the marginal propensity to consume. Therefore, choice B is the correct answer.

Other Things Constant, How Would a Smaller Marginal Propensity to Save