Use the table below to answer the following questions.
Table 27.1.2

-Refer to Table 27.1.2. What is the value of the marginal propensity to save?
A)0.27
B)0.25
C)0.67
D)0.33
E)1.33

Question

Use the table below to answer the following questions.
Table 27.1.2
 
-Refer to Table 27.1.2. What is the value of the marginal propensity to save?
A)0.27 
B)0.25 
C)0.67 
D)0.33 
E)1.33

Quizplus · Accepted Answer

The marginal propensity to save is calculated by taking the change in savings divided by the change in income. Using the given data in the table, the change in income from $800 billion to $900 billion is $100 billion and the change in savings from $300 billion to $330 billion is $30 billion. Therefore, the marginal propensity to save is 0.3 or 0.33 (rounded to two decimal places). Choice D is the closest option.

Use the Table Below to Answer the Following Questions