2. In year 1, Adam earns $1,000 and saves $100. In year 2, Adam gets a $500 raise so that he earns a total of $1,500. Out of that

$1,500, he saves $200. What is Adam’s MPC out of his $500 raise? LO30.1

a. 0.50.

b. 0.75.

c. 0.80.

d. 1.00.