If the marginal propensity to save is 0.25, then the marginal propensity to consume is: MCQ with Answer and Explanation

If the marginal propensity to save is 0.25, then the marginal propensity to consume is:
A. 0.50
B. 0.75
C. 0.25
D. 1.25
Answer: Option B
Solution (By JKSSB Mock Tests)
MPC + MPS = 1, so MPC = 1 - 0.25 = 0.75.

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Practice More Economy Set 1 Questions

Question #1
Which of the following is a feature of the 'Dual-Self' or 'Planner-Doer' models of self-control?
A. There is no internal conflict
B. Only the doer determines all behaviour
C. Individuals have a single consistent set of preferences
D. Individuals are modelled as consisting of a far-sighted planner and a myopic doer who are in conflict

Correct Answer: Option D


Explanation:
Planner-doer models represent the individual as containing both a long-run planner who values future consequences and a short-run doer who is tempted by immediate rewards, generating self-control problems.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Goods and Services Tax' on hotel room service is:
A. 5%
B. 12%
C. 18%
D. 28%

Correct Answer: Option C


Explanation:
Room service in hotels generally attracts 18% GST.

This question belongs to: Economy GK Economy Set 1
Question #3
In the context of the digital economy, 'Zero Marginal Cost' of information goods implies that:
A. Marginal cost is always high
B. Only physical goods have zero marginal cost
C. All goods have zero marginal cost
D. Once produced, an additional digital copy can be distributed at near-zero cost

Correct Answer: Option D


Explanation:
Information goods and digital products typically have high fixed costs of production but near-zero marginal costs of reproduction and distribution, creating distinctive pricing and competition issues.

This question belongs to: Economy GK Economy Set 1