The Above Figure Shows the Saving Schedules for Economies 1

question 191

Multiple Choice

The above figure shows the saving schedules for economies 1, 2, 3, and 4.Which economy has the highest marginal propensity to consume?

• A)1
• B)2
• C)3

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Definitions:

Incremental Value

The additional or added value created by undertaking a particular action or project, compared to not proceeding.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the present value of expected cash flows minus the initial investment.

Outstanding Shares

Shares of a company that are owned by investors, including restricted shares held by the company’s insiders.

Value Per Share

A measure reflecting the equity value of a company divided by its total number of outstanding shares, indicating what each share is worth.