Given That Autonomous Consumption Equals $1,000,disposable Income Equals $20,000,and the MPC

question 28

Multiple Choice

Given that autonomous consumption equals $1,000,disposable income equals $20,000,and the MPC equals 0.80,the level of

• A)Saving equals $4,000.
• B)Saving equals $19,000.
• C)Consumption equals $17,000.
• D)Consumption equals $16,000.

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Definitions:

Order of Magnitude

A classification of scale or size of a quantity, where each class is ten times greater or smaller than the one before.

Gross Method

An accounting practice where purchases are recorded at the total invoice cost without deducting any purchase discounts.

Net Method

An accounting approach where discounts for early payment are assumed to be taken and thus are deducted from the cost of purchases.

Accounts Payable

Short-term liabilities representing amounts owed to suppliers or creditors for goods and services received.