If the Marginal Propensity to Consume (MPC)is Equal to 0

question 101

Multiple Choice

If the marginal propensity to consume (MPC) is equal to 0.9,an increase in household income causes desired consumption expenditure to

• A)rise by more than the increase in income.
• B)rise by the full increase in income.
• C)rise by less than the full increase in income.
• D)fall,as an increase in income will increase saving.
• E)remain constant,because the MPC is also constant.

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Definitions:

Reaction Time

The amount of time it takes to respond to a stimulus, often used as an indicator of sensory and neural processing speed.

Functional Age

An assessment of an individual's ability to perform tasks and roles expected of someone of their chronological age, often related to their physical, psychological, and social capabilities.

Reflexes

Involuntary and nearly instantaneous movements in response to a stimulus.

Gross Motor Skills

The abilities required to control the large muscles of the body for walking, jumping, balancing, and other physical activities.