Refer to the information provided in Figure 23.5 below to answer the question(s) that follow. Figure 23.5
-Refer to Figure 23.5. In this graph, 0.25 represents this society's
A) MPC.
B) MPS.
C) saving function.
D) consumption function.

Question

Refer to the information provided in Figure 23.5 below to answer the question(s) that follow.  Figure 23.5
-Refer to Figure 23.5. In this graph, 0.25 represents this society's
A) MPC. 
B) MPS. 
C) saving function. 
D) consumption function.

Quizplus · Accepted Answer

In the graph, the vertical axis represents saving and the horizontal axis represents income. The steepness of the saving function line indicates the slope or marginal propensity to save (MPS) which in this case is 0.25. Therefore, the answer is B.

Refer to the Information Provided in Figure 23