Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2. Suppose Jerry's MPC decreases. At income Y₁, Jerry's A) consumption will be greater than his income. B) consumption will be less than his income. C) saving will be zero. D) all of the above

Question

Quizplus · Accepted Answer

If Jerry's MPC decreases, he will consume a smaller proportion of his income, meaning that his consumption will be less than his income. Therefore, he will save some portion of his income and his saving will be greater than zero. Option A is incorrect because consumption cannot be greater than income. Option C is incorrect because Jerry's saving will be positive. Option D is incorrect because only option B is true.

Refer to the Information Provided in Figure 8