In an economy with no taxes or imports,if disposable income increases by $2 000 and consumption increases by $1 400,the marginal propensity to save is 0.21.

Name: In an economy with no taxes or imports,if disposable income increases by $2 000 and consumption increases by $1 400,the marginal propensity to save is 0.21.
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Quizplus · Accepted Answer

The marginal propensity to save (MPS) is calculated as 1 minus the marginal propensity to consume (MPC). Here, MPC is $1,400/$2,000 = 0.7, so MPS is 1 - 0.7 = 0.3, not 0.21.

In an Economy with No Taxes or Imports,if Disposable Income