The Marginal Propensity to Consume Is The_________

question 437

Multiple Choice

The marginal propensity to consume is the_________

• A) amount saving increases when consumption expenditure decreases.
• B) fraction of a change in consumption expenditure that is not saved.
• C) fraction of a change in disposable income spent on consumption expenditure.
• D) fraction of a change in saving spent on consumption expenditure.

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Definitions:

Wage Rate

The standard amount of compensation received by a worker per unit of time (hour, day, etc.) for their labor.

Labor Productivity

A measure of economic performance that calculates the amount of goods and services produced per unit of labor.

Nominal Wages

Refers to the actual money paid to workers, not adjusted for inflation.

Price Level

The general average of the prices of goods and services in an economy at a given time.