Suppose Consumption Is $2,700 Million When Income Equals $2,000 Million

question 110

Multiple Choice

Suppose consumption is $2,700 million when income equals $2,000 million, and consumption increases to $3,125 million when income equals $2,500. What is the marginal propensity to consume?

• A)425
• B)0.85
• C)0.15
• D)850
• E)None of these

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Definitions:

Accurate

A term describing information or measurements that are correct, precise, and free of errors.

Cent

A form of money present in multiple countries, representing one one-hundredth of a decimal currency such as the dollar or euro.

Accurate

The quality of being correct in all details; exactness.

Cent

A monetary unit in various countries, equal to one-hundredth of a basic unit of currency.