The Marginal Propensity to Consume Is Equal to

question 197

Multiple Choice

The marginal propensity to consume is equal to

• A) the desired amount of consumption expenditure as a proportion of disposable income.
• B) the change in consumption expenditure from a change in disposable income.
• C) what people spend out of total disposable income.
• D) the average, after-tax consumption amount.

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Definitions:

Price Ceiling

A cap established by the government on the maximum price that can be set for a good, service, or resource.

Market Equilibrium

A state where market supply equals market demand, leading to stable prices and quantities.

Price Ceiling

A cap on prices set by the government, limiting the maximum amount that can be charged for goods or services.

Shortage

A market condition where the demand for a product or service exceeds its supply at a particular price.