$$\begin{array} { | c | c | }
\hline \text { Disposable Income } & \text { Consumption } \
\hline \$ 0 & \$ 8 \
\hline 80 & 80 \
\hline 160 & 152 \
\hline 240 & 224 \
\hline 320 & 296 \
\hline 400 & 368 \
\hline
\end{array}$$ The disposable income (DI) and consumption (C) schedules are for a private, closed economy. All ?gures are in billions of dollars. The marginal propensity to save in this economy is
A) 0.1.
B) 0.72.
C) 0.8.
D) 0.9.

Question

$$\begin{array} { | c | c | } 
\hline \text { Disposable Income } & \text { Consumption } \
\hline \$ 0 & \$ 8 \
\hline 80 & 80 \
\hline 160 & 152 \
\hline 240 & 224 \
\hline 320 & 296 \
\hline 400 & 368 \
\hline
\end{array}$$ The disposable income (DI) and consumption (C) schedules are for a private, closed economy. All ?gures are in billions of dollars. The marginal propensity to save in this economy is
A) 0.1.
B) 0.72.
C) 0.8.
D) 0.9.

Quizplus · Accepted Answer

The marginal propensity to consume (MPC) is 0.9, calculated as the change in consumption divided by the change in disposable income (e.g., (80-8)/(80-0) = 0.9). The marginal propensity to save (MPS) is 1 - MPC, which is 0.1.

The Disposable Income (DI) and Consumption (C) Schedules Are for