Question
Economics Question on Consumer behaviour
Consider a two-sector model :
Smaller the marginal propensity to save (MPS),
A. Steeper saving function
B. Smaller value of the multiplier
C. Consumption function has flat slope
D. Larger value of the multiplier
E. Flatter saving function
Choose the most appropriate answer from the options given below:
A
A and B only
B
C and E only
C
D and E only
D
B and D only
Answer
D and E only
Explanation
Solution
The correct answer is (C) : D and E only