Suppose the economy's saving schedule shifts from S₁to S₂as shown in the below diagram.We can say that its: A)MPC has increased. B)MPS has increased. C)APS has increased at all levels of disposable income. D)APS has decreased at all levels of disposable income.

Question

Quizplus · Accepted Answer

The saving schedule has shifted upwards, indicating that at each level of disposable income, people are now saving more than they were before. This means that the MPS (Marginal Propensity to Save) has increased.

Suppose the Economy's Saving Schedule Shifts from S1to S2as Shown

Suppose the Economy's Saving Schedule Shifts from S₁to S₂as Shown