The greater is the marginal propensity to consume, the

Question

Multiple Choice
smaller is the marginal propensity to save.
higher is the interest rate.
smaller is the average propensity to consume.
lower is the price level.

Answer 1

The correct answer is:

smaller is the marginal propensity to save.

This is because the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) are related concepts that sum up to 1. Therefore, if the MPC is higher, the MPS must be lower.