Exhibit 9-9
-The smaller the marginal propensity to save,other things constant,
A)the smaller the marginal propensity to consume
B)the smaller the multiplier
C)the flatter the consumption function
D)the flatter the saving function
E)the steeper the saving function

Question

Exhibit 9-9 
-The smaller the marginal propensity to save,other things constant,
A)the smaller the marginal propensity to consume 
B)the smaller the multiplier 
C)the flatter the consumption function 
D)the flatter the saving function 
E)the steeper the saving function

Quizplus · Accepted Answer

The marginal propensity to save (MPS) is the portion of additional income that is saved. A smaller MPS means a larger marginal propensity to consume (MPC), leading to a steeper consumption function and a flatter saving function.

Exhibit 9-9 -The Smaller the Marginal Propensity to Save,other Things Constant