-Using the data from the above table, the marginal propensity to save is
A) constant at 0.75.
B) falling as disposable income is rising.
C) 0 when disposable income is $600.
D) constant at 0.25.

Question

-Using the data from the above table, the marginal propensity to save is
A) constant at 0.75. 
B) falling as disposable income is rising. 
C) 0 when disposable income is $600. 
D) constant at 0.25.

Quizplus · Accepted Answer

The marginal propensity to save (MPS) is the fraction of additional income that is saved. If the MPS is constant at 0.25, it means that for every additional dollar of income, 25 cents is saved.

-Using the Data from the Above Table, the Marginal Propensity