The Marginal Propensity to Consume Is

question 45

Multiple Choice

The marginal propensity to consume is

• A)That part of the average consumer dollar that goes to saving.
• B)The same as the spending multiplier.
• C)The change in consumption divided by the change in disposable income.
• D)Always equal to 1.

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Definitions:

Journal Entry

The recording of financial transactions into accounting records, detailing the accounts that are affected and in what way.

Borrow

The act of receiving something of value in exchange for the promise to return it or its equivalent at a later date.

Credit Card Company

A financial institution that issues credit cards, extending credit for consumers to purchase goods and services with the promise of future repayment.

Service Charge

An additional fee charged for services rendered, often seen in the hospitality and banking industries.