Use the Following to Answer Questions

question 39

Multiple Choice

Use the following to answer questions .
Exhibit: Income and Consumption

-(Exhibit: Income and Consumption) Calculate the marginal propensity to consume based on the information in the table.

• A) 0.00
• B) 0.20
• C) 0.80
• D) 1.40

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Definitions:

Automatic Withdrawals

Electronic funds transfers or payments automatically deducted from a bank account, typically used for recurring expenses.

Endowment Effect

The phenomenon where individuals value an owned object higher than they would if they did not own it.

Raffle Prize

A reward given to a randomly selected participant in a raffle, where people enter by purchasing tickets for a chance to win.

Myopia

Refers to the difficulty human beings have with conceptualizing the more distant future. Leads to decisions that overly favor present and near-term options at the expense of more distant future possibilities.