Share With

If marginal propensity to save equals 0.50, then the marginal propensity to consume is:
1) 1.25.
2) 0.50. 3) 0.70. 41 1.00.

pur-new-sol

Answer

So, the correct option is 2nd "0.50".

Explanation

Computation of Marginal Propensity to Consume:

Marginal Propensity to Consume + Marginal Propensity to Save = 1

Marginal Propensity to Consume + 0.50 = 1

Marginal Propensity to Consume = 1 - 0.50

Marginal Propensity to Consume = 0.50

Related Questions