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If a Household's Income Falls from $26,000 to $24,000 and Its

Question 160

Multiple Choice

If a household's income falls from $26,000 to $24,000 and its savings fall from $1,000 to $500, then its _____


A) marginal propensity to consume is 0.98.
B) marginal propensity to consume is 1.33.
C) marginal propensity to consume is 0.25.
D) marginal propensity to save is 0.02.
E) marginal propensity to save is 0.25.

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