Refer to the information provided in Table 23.1 below to answer the question(s) that follow.
Table 23.1
-Refer to Table 23.1. Society's MPS is
A) 0.05.
B) 0.10.
C) 0.20.
D) 0.95.

Question

Refer to the information provided in Table 23.1 below to answer the question(s) that follow.
Table 23.1 
-Refer to Table 23.1. Society's MPS is
A) 0.05. 
B) 0.10. 
C) 0.20. 
D) 0.95.

Quizplus · Accepted Answer

Society's MPS is defined as the fraction of extra resources that society saves and invests to increase future production. In Table 23.1, we can see that when the economy is at full employment level B (where the production possibility curve intersects the full employment line), the extra resources available for investment are $200 billion, while the current consumption expenditure is $2,000 billion. Therefore, the MPS is 200/2000 = 0.10 or 10%. Choice B is the correct answer.

Refer to the Information Provided in Table 23