If disposable income is $400 billion, consumption spending is $380 billion, and MPC is 0.5, what is the level of saving?

Question

Quizplus · Accepted Answer

MPC (Marginal Propensity to Consume) is the fraction of additional disposable income that is spent on consumption. MPC + MPS (Marginal Propensity to Save) always equals 1. Therefore, MPS is 1 - MPC. 
In this case, MPS = 1 - 0.5 = 0.5 
The level of saving is equal to MPS times disposable income.
Saving = MPS * disposable income = 0.5 * $400 billion = $200 billion. 
However, this is the absolute level of saving. The question is asking for the change in saving due to consumption spending. 
The change in saving due to consumption spending = MPC * consumption spending 
= 0.5 * $380 billion 
= $190 billion. 
Since consumption spending is higher than saving, the change in saving is negative. 
The actual level of saving is $20 billion ($200 billion - $190 billion), which is the option A.

If Disposable Income Is $400 Billion, Consumption Spending Is $380