Refer to the information provided in Figure 8.1 below to answer the questions that follow. Figure 8.1
-Refer to Figure 8.1. A decrease in the MPS
A) makes the consumption function flatter.
B) makes the saving function flatter.
C) shifts the consumption function upward.
D) shifts the saving function downward.

Question

Refer to the information provided in Figure 8.1 below to answer the questions that follow.  Figure 8.1
-Refer to Figure 8.1. A decrease in the MPS
A) makes the consumption function flatter. 
B) makes the saving function flatter. 
C) shifts the consumption function upward. 
D) shifts the saving function downward.

Quizplus · Accepted Answer

A decrease in the marginal propensity to save (MPS) means that people are saving less out of their additional income, which makes the saving function flatter.

Refer to the Information Provided in Figure 8