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Aggregate Demand, Consumption & Saving · Question 43 of 60

The graph shows a saving function.

Question 43

MediumOriginal question

The graph shows a saving function. What is the MPS?

A saving line S = −40 + 0.25Y that starts at −₹40 crore below the income axis, crosses it at B (income ₹160 crore, saving zero) and reaches ₹60 crore of saving at K, where income is ₹400 crore.
Options for question 43

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. From B to K, income rises 160 → 400 (by 240) and saving rises 0 → 60 (by 60).

  2. MPS = 60 ÷ 240 = 0.25.

Worth noting

0.15 is the APS at K (60 ÷ 400).

Concept
MPS from the saving line
Typical time
70 s
Your time
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The rule this testsThe saving function and break-even
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