The following table illustrates the multiplier process in a private closed economy:

-Refer to the above table.The marginal propensity to save is:
A) .5.
B) .25.
C) .2.
D) .1.

Question

The following table illustrates the multiplier process in a private closed economy:
 
-Refer to the above table.The marginal propensity to save is:
A) .5. 
B) .25. 
C) .2. 
D) .1.

Quizplus · Accepted Answer

The marginal propensity to save (MPS) is the fraction of additional income that is saved. If the marginal propensity to consume (MPC) is 0.8, then MPS is 1 - MPC = 0.2.

The Following Table Illustrates the Multiplier Process in a Private