Marginal Propensity to Consume Is the Portion of

question 95

Multiple Choice

Marginal propensity to consume is the portion of

• A) additional income that is saved.
• B) total income that is spent on consumption.
• C) additional income that is spent on consumption.
• D) total income that is saved.
• E) additional income that is taxed.

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Definitions:

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

Classified Balance Sheet

A financial statement that organizes a company's assets, liabilities, and equity into subcategories for clear understanding.

Gross Profit Section

The portion of an income statement that shows revenue minus the cost of goods sold, indicating the profit made from selling goods before other expenses are deducted.

Merchandising Company

A business that purchases finished goods for resale, making a profit on the merchandise sold.