QUESTION 354036322824201612840-4E,QH+35. What is the "mps"?a) 1/3O b) 2/3O c) 3/2O d) 1/2e) 4816243240AECS

MPS stands for Marginal Propensity to Save. It quantifies the amount of additional income that an individual or a household is likely to save rather than spend on consumption.The following graph is provided:The curves/lines depict the following parameters:C = ConsumptionI = InvestmentAE = Aggregate ExpenditureQ = Output/IncomeS = SavingThe slope of the aggregate expenditure line represents the marginal propensity to consume (MPC).To calculate the slope of AE line, we need to identify any 2 coordinates on the graph as shown below:On the AE line, 2 coordinates are identified in the above graph depicted by yellow lines. The coordinates are:(x1, y1) = (6, 12)(x2, y2) = (24, 24)Thus, Marginal Propensity to Consume (MPC) = MPC + MPS = 1Putting the value of MPC = , we getThe correct answer is Option (a) = The correct answer is Option (a) =

Answered: 35. What is the "mps"? O a) 1/3 Ob) 2/3…

Business

Economics

35. What is the "mps"? O a) 1/3 Ob) 2/3 Oc) 3/2 O d) 1/2 O e) 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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