Economics 9708 · AS & A Level · Aggregate demand and aggregate supply

Aggregate demand and aggregate supply — practice question

The diagram illustrates a consumption function. When income rises, what occurs to the average propensity to save and the marginal propensity to save?

  • Aaverage propensity to save: decreases; marginal propensity to save: decreases
  • Baverage propensity to save: decreases; marginal propensity to save: increases
  • Caverage propensity to save: increases; marginal propensity to save: decreases
  • Daverage propensity to save: increases; marginal propensity to save: increases

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