Exhibit 21-4 -Refer to Exhibit 21-4. What Value Goes in Blank (C)

question 89

Multiple Choice

Exhibit 21-4

-Refer to Exhibit 21-4. What value goes in blank (C) ?

• A) 25
• B) 5
• C) 14.5
• D) 10
• E) There is not enough information to answer this question.

---

Definitions:

Marginal Propensity

The ratio of a change in consumption (or saving) to a change in income, indicating how much of an income change individuals will spend or save.

Disposable Income

The amount of money available for savings or expenditure after all taxes and social security fees have been deducted.

Induced Consumption

Consumption that changes in response to changes in income or wealth, as opposed to autonomous consumption, which does not change when income changes.

Disposable Income

The amount of money that households have available for spending and saving after income taxes have been deducted.