This data represents a hypothetical economy (all figures are in $billions):

-Refer to the information above to answer this question.What is the value of the MPS?
A)0.15.
B)0.20.
C)0.25.
D)0.40.
E)0.60.

Question

This data represents a hypothetical economy (all figures are in $billions):
 
-Refer to the information above to answer this question.What is the value of the MPS?
A)0.15. 
B)0.20. 
C)0.25. 
D)0.40. 
E)0.60.

Quizplus · Accepted Answer

The MPS is the change in consumption divided by the change in income. In this case, the change in consumption is $100 and the change in income is $500, so the MPS is 100/500 = 0.20.

This Data Represents a Hypothetical Economy (All Figures Are in $Billions)