Refer to the above data.The slope of the saving schedule is:
A).80.
B).10.
C).20.
D).15.

Question

Refer to the above data.The slope of the saving schedule is:
A).80. 
B).10. 
C).20. 
D).15.

Quizplus · Accepted Answer

The saving schedule has two points (500, 900) and (600, 1000). The formula for finding the slope of a line between two points is:

Slope = (change in y) / (change in x)

In this case, the change in y is 100 (1000 - 900), and the change in x is 100 (600 - 500). Plugging these values into the formula, we get:

Slope = 100 / 100 = 1

However, this is the slope of the line in terms of dollars. To get the slope in terms of the marginal propensity to save (MPS), we need to divide the change in saving by the change in income. Since the MPC + MPS = 1, the change in saving is equal to the change in income. Therefore, the slope of the saving schedule in terms of MPS is:

MPS = change in saving / change in income = 1 / 100 = 0.01

Multiplying by 100 to express this as a percentage, we get:

MPS = 1%

Therefore, the correct answer is C) 20%.

Refer to the Above Data