Define the marginal propensity to consume (MPC) and the marginal propensity to save (MPS), and explain why MPC + MPS always equals 1
What will be an ideal response?
MPC is the fraction of additional income that is spent. MPS is the fraction of additional income that is saved. The MPC + MPS must equal 1 because additional income is either spent or saved, so the two fractions must add up to 1.
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A. is a net exporter of that good. B. is not able to produce that good. C. is a net importer of that good. D. has a comparative advantage in that good.
In what type of market is a cartel possible?
A) a market in which there are only a few firms and barriers to entry exist B) a market in which firms sell a homogeneous good C) a market in which firms sell a differentiated good D) a market in which there are many firms
If a small open economy reduces its budget deficit, the result will be:
A) a lower world real interest rate, but no change in the domestic real interest rate B) a lower domestic real interest rate, but no change in the world real interest rate C) lower domestic and world real interest rates D) no change in either the domestic or world real interest rate
The M form organization says China's success is due to:
a. central planning b. state capitalism c. regional competition d. the Hukuo system e. none of the above