If the Marginal Propensity to Consume (MPC) Is Positive and Less

Multiple Choice

If the marginal propensity to consume (MPC) is positive and less than one, an increase in disposable income will _____.

A) increase both consumption and saving
B) increase consumption and decrease saving
C) decrease both consumption and saving
D) decrease consumption but increase saving
E) increase saving, but we cannot predict what will happen to consumption