Suppose When John's Income Increases from $10,000 to $15,000, His

question 224

Multiple Choice

Suppose when John's income increases from $10,000 to $15,000, his consumption increases from $3,000 to $4,500. What is the value of his marginal propensity to save?

• A) 0.7
• B) 0.3
• C) 0.2
• D) 0.8

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Definitions:

Intra-Entity Transaction

Transactions that occur between two segments within the same company.

Bonds

Debt securities issued by corporations or governments to raise funds, promising to pay back the principal along with interest.

Carrying Value

The book value of an asset or liability on a company's balance sheet, taking into account depreciation, amortization, and impairment charges.

Noncontrolling Interest

An ownership position in which a shareholder owns less than 50% of a company's stock and therefore has no control over decisions.