The MPS Equals the Ratio of

question 28

Multiple Choice

The MPS equals the ratio of

• A) saving to real GDP.
• B) saving to consumption expenditure.
• C) the change in saving to the change in consumption expenditure.
• D) None of the above answers is correct.

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Definitions:

Transaction Analysis

The process of studying a transaction to determine its economic effect on the business in terms of the accounting equation.

Accounting Equation

The foundational principle of double-entry bookkeeping, stating that assets equal liabilities plus shareholders' equity.

Components

Elements or parts that combine to form a larger product or system.

Net Profit Margin Ratio

A profitability metric that shows the percentage of revenue that remains as net income after all expenses have been deducted.