Explain why the marginal propensity to save and the marginal propensity to consume sum to 1


People do two things with their income: spend it or save it. What is not spent is necessarily saved. If Libby's income increases by $100 . she will spend, say, $75 on consumption (her MPC = 0.75) which
means she will save $25 (her MPS = 0.25). 0.75 + 0.25 = 1.00

Economics

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Economics

The most frequently reported price index is ________

A) the consumer price index (CPI) B) the gross domestic product (GDP) deflator C) the personal consumption expenditure (PCE) deflator D) chain weighted GDP E) the interest income deflator

Economics

A monopolist has determined that at the current level of output the price elasticity of demand is -0.15. Which of the following statements is true?

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Economics

As Bubba's Bubble Gum Company adds workers while using the same amount of machinery, some workers may be underutilized because they have little work to do while waiting in line to use the machinery. When this occurs, Bubba's Bubble Gum Company encounters

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Economics