Suppose Consumption Increases by $250 Million When Income Increases by $300

question 113

Multiple Choice

Suppose consumption increases by $250 million when income increases by $300. What is the marginal propensity to consume?

• A)0.833
• B)83.3
• C)250
• D)50
• E)None of these

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Definitions:

Paid-In Capital

Funds received by a company from selling its equity shares to investors, over and above the par or stated value of the shares.

Issuing Stock

The process of offering new shares of a company's stock to investors.

Stated Value

A nominal value assigned to a share of stock by the company's board of directors, which is not related to the market value of the stock.

Accounting Purposes

The specific reasons or objectives for maintaining and processing financial records, including compliance, reporting, and decision-making needs.