$$\begin{array} { | l | l | }
\hline \begin{array} { l }
\text { Disposable } \
\text { income } \
\text { (dollars) }
\end{array} & \begin{array} { l }
\text { Consumption } \
\text { exp enditure (dollars) }
\end{array} \
\hline 100 & 225 \
\hline 200 & 300 \
\hline 300 & 375 \
\hline 400 & 450 \
\hline 500 & 525 \
\hline 600 & 600 \
\hline
\end{array}$$
-Using the data from the above table, the marginal propensity to save is
A) constant at 0.25.
B) constant at 0.75.
C) falling as disposable income is rising.
D) 0 when disposable income is $600.

Question

$$\begin{array} { | l | l | } 
\hline \begin{array} { l } 
\text { Disposable } \
\text { income } \
\text { (dollars) }
\end{array} & \begin{array} { l } 
\text { Consumption } \
\text { exp enditure (dollars) }
\end{array} \
\hline 100 & 225 \
\hline 200 & 300 \
\hline 300 & 375 \
\hline 400 & 450 \
\hline 500 & 525 \
\hline 600 & 600 \
\hline
\end{array}$$
-Using the data from the above table, the marginal propensity to save is
A) constant at 0.25.
B) constant at 0.75.
C) falling as disposable income is rising.
D) 0 when disposable income is $600.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is constant at 0.75, calculated as the change in consumption divided by the change in disposable income. Therefore, the marginal propensity to save (MPS) is 1 - MPC, which is constant at 0.25.

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