If the Marginal Propensity to Consume Is 0

question 135

Multiple Choice

If the marginal propensity to consume is 0.8, the value of the marginal propensity to save is:

• A) 5.
• B) 0.8.
• C) 1.25.
• D) 0.2.

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Definitions:

Seller Bears

Refers to situations where the seller is responsible for any additional costs or risks associated with a transaction.

FICA Tax

A U.S. federal payroll tax that funds Social Security and Medicare, contributions are made by both employees and employers.

Burden Falls

An economic term referring to how the costs or economic burdens of a policy, tax, or regulation are distributed among various stakeholders.

Elastic

Elastic, in economics, refers to a situation where the quantity demanded or supplied of a good or service significantly changes in response to changes in price.