An increase in the marginal propensity to save will

Question

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The marginal propensity to save is the fraction of each additional unit of income that is saved rather than spent on consumption. An increase in the marginal propensity to save means that consumers are saving a larger proportion of their income, and therefore spending a smaller proportion on consumption. This will cause the consumption function to be flatter, as there will be a smaller increase in consumption for each increase in income.

An Increase in the Marginal Propensity to Save Will