Suppose the Marginal Propensity to Consume Out of Disposable Income

question 81

Multiple Choice

Suppose the marginal propensity to consume out of disposable income is 0.6 and the marginal propensity to import is 0.14.If the net tax rate is 0.1,then what is the marginal propensity to spend in this economy?

• A)0.30
• B)0.40
• C)0.46
• D)0.50
• E)0.60

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Definitions:

Sorting Mechanism

A process or system used to classify, organize, or rank individuals or groups based on certain criteria.

Technological Advancements

Progress or innovation in technology that enhances efficiency, productivity, or brings new tools and methods into use.

Lower-Class People

Individuals or groups positioned at the bottom of a societal hierarchy based on income, occupation, education, and/or social status.

Social Exclusion

A process where individuals or groups are systematically blocked from rights, opportunities, and resources that are normally available to members of society and necessary for social integration.