The Portion of Additional Income That Is Spent on Consumption

question 66

Multiple Choice

The portion of additional income that is spent on consumption is

• A) average propensity to consume (APC).
• B) marginal propensity to consume (MPC).
• C) marginal propensity to save (MPS).
• D) average propensity to save (APS).
• E) 1 minus marginal propensity to consume

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Definitions:

Mere Exposure Effect

A mental effect where individuals grow fond of something simply due to their familiarity with it.

Social Traps

Situations where a group or individual acts in a way that seems beneficial in the short term but leads to negative outcomes in the long term for everyone involved.

Just-world Phenomenon

The cognitive bias that a person's actions are inherently inclined to bring morally fair and fitting consequences to that person, to the end of all noble actions being rewarded and all evil actions punished.

Altruism

The selfless concern for the well-being of others, often leading to actions for their benefit without personal gain.