The Sum of the Marginal Propensity to Save and the Marginal

question 149

Multiple Choice

The sum of the marginal propensity to save and the marginal propensity to consume

• A)always equals 0.
• B)never equals 1.
• C)is greater than zero but less than 1.
• D)always equals 1.
• E)sometimes equals 1.

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Definitions:

Sole Proprietorship

A business owned and operated by one person, where there is no legal distinction between the owner and the business entity.

Unlimited Life

Refers to corporations having a perpetual existence, not limited by time, allowing them to continue operations indefinitely unless dissolved.

Agency Problem

A conflict of interest arising between principals (owners/shareholders) and agents (company executives/managers), where the agent may make decisions that benefit themselves at the expense of the principals.

Partnership Agreement

A legal document that outlines the rights, responsibilities, and profit and loss distribution among partners in a business partnership.