The Marginal Propensity to Consume Is Given by

question 199

Multiple Choice

The marginal propensity to consume is given by

• A) the change in consumption divided by the change in saving.
• B) the change in consumption divided by the change in disposable personal income.
• C) consumption divided by the change in disposable personal income.
• D) consumption divided by disposable income.

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Definitions:

Sunk Cost

A past expenditure that has already been incurred and cannot be recovered, which should not affect current or future financial decisions.

Market Value

The current price at which an asset or company can be bought or sold, determined by the supply and demand dynamics in the market.

Erosion Cost

Costs that occur when the introduction of a new project or product negatively impacts the sales and profits of existing products.