Multiple Choice
Linda earned an income of $3,000 per month, which has now increased to $3,500 per month. She saves 10 percent and spends the remainder on food, lodging, and other expenses. So far, she has managed to save $20,000. What is her marginal propensity to consume?
A) Her marginal propensity to consume is 0.99.
B) Her marginal propensity to consume is 0.90.
C) Her marginal propensity to consume is 0.86.
D) Her marginal propensity to consume is 0.10.
E) Her marginal propensity to consume is 0.01.
Correct Answer:
Verified
Correct Answer:
Verified
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