-In the above table, the marginal propensity to save when disposable income changes from $5,000 to $6,000 is
A) 0.1.
B) 0.2.
C) 0.8.
D) -0.2.

Question

-In the above table, the marginal propensity to save when disposable income changes from $5,000 to $6,000 is
A) 0.1. 
B) 0.2. 
C) 0.8. 
D) -0.2.

Quizplus · Accepted Answer

The marginal propensity to save (MPS) is calculated as the change in savings divided by the change in disposable income. If disposable income increases from $5,000 to $6,000, and assuming savings increase by $200, then MPS = $200 / $1,000 = 0.2.

-In the Above Table, the Marginal Propensity to Save When