A change in the amount saved due to a change in income is represented by a:
A) Shift of the entire saving schedule
B) Movement along the saving schedule
C) Change in the marginal propensity to save
D) Change in the marginal propensity to consume

Question

Quizplus · Accepted Answer

A change in income that leads to a change in the amount saved would result in a movement along the saving schedule because the marginal propensity to save (MPS) remains constant. The saving schedule shows the relationship between income and saving when all other factors, such as the MPS, remain constant. Therefore, a change in income would cause a movement along the saving schedule, rather than a shift of the entire schedule. Changes in the MPS or the marginal propensity to consume (MPC) would cause shifts in the saving schedule.

A Change in the Amount Saved Due to a Change