The Marginal Propensity to Consume Is

question 135

Multiple Choice

The marginal propensity to consume is

• A)Total consumption in a given period divided by total disposable income.
• B)The percentage of total disposable income spent on consumption.
• C)That part of the average consumer dollar that goes to the purchase of final goods.
• D)The fraction of each additional dollar of disposable income spent on consumption.

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Definitions:

Social Security Tax

A payroll tax that finances the United States' social security program, providing benefits for retirees, the disabled, and children of deceased workers.

Hourly Wage Rate

The amount of money paid for each hour of work performed, typically associated with part-time or contractual employment.

Gross Pay

The total compensation a person receives before any deductions or taxes are taken out.

Medicare Tax Rate

The percentage of an individual's or employer's earnings that is contributed to Medicare, a U.S. federal health insurance program.