The fraction of a change in income that is saved is known as _____
A) disposable income.
B) the consumption function.
C) the marginal propensity to consume.
D) the marginal propensity to save.
E) net wealth.

Question

Quizplus · Accepted Answer

The fraction of a change in income that is saved is known as the marginal propensity to save. The other options are incorrect as disposable income refers to the income available for spending after taxes, consumption function refers to the relationship between income and consumption, marginal propensity to consume refers to the fraction of a change in income that is spent, and net wealth refers to the value of assets minus liabilities.

The Fraction of a Change in Income That Is Saved