Focus on the concept of marginal propensity to consume and reflect on which of the following would be implied by a highmarginal propensity to consume. O A small change in consumption when income changes O A high saving rate O A high marginal tax rate O An equilibrium level of income near full employment O A low marginal propensity to save

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A: The consumption function = c+ b(Y-T) where, b = slope(MPC)

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A: The formula for the multiplier is as follows : Multiplier = 1 / 1 - MPC

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Q: 34 64. If the marginal propensity to save (MPS) is small, O a. make the simple multiplier larger. O…

A: Multiplier =1/1-MPC or 1/MPS

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A: Disposable Income = $1000 MPS (or Marginal Propensity to Save) = 0.15 Since, MPC + MPS = 1,…

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Q: Given that marginal propensity to save (MPS) is 0.5, what is the multiplier? 4 5 0.5

A: According to the question, marginal propensity to save i.e. MPS is 0.5. Formula for multiplier is…