The marginal propensity to save (MPS) is computed as the change in:
a. savings divided by the change in saving.
b. savings divided by the change in income.
c. saving divided by the change in GDP.
d. None of these.
b
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Which of the following tools does the Fed use to pursue its objectives?
A) It influences short-run and long-run interest rates. B) It provides loans to new firms and businesses at extremely low rates of interest. C) It determines the efficient level of government spending. D) It influences market prices through price ceilings and price floors.
Economic profit provides an incentive for persons investing in human and physical capital to
a. undertake investment projects yielding an uncertain return. b. discover and develop beneficial (productive) investment opportunities. c. produce products that increase the value of resources. d. do all of the above.