The Change in Desired Consumption Divided by the Change in Disposable

question 11

Multiple Choice

The change in desired consumption divided by the change in disposable income that brought it about is called the

• A)average propensity to consume.
• B)average propensity not to consume.
• C)consumption function.
• D)marginal propensity to consume.
• E)marginal propensity not to spend.

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Definitions:

Net Income

Profit after deduction of all operational, interest, and tax expenses.

Capital Account Balance

A measure of the financial value of a nation's assets minus liabilities in the capital account, reflecting changes like foreign investment.

Partnership Capital

The total funds contributed by the partners of a partnership firm, which are used in the business and represented on the firm's balance sheet.

Income-sharing Ratio

The predetermined proportion used to distribute earnings or losses among business partners or shareholders according to their agreement.