If the Marginal Propensity to Consume Is 0

question 137

True/False

If the marginal propensity to consume is 0.8, then $80 of every additional $100 of income will be spent on consumption.

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Definitions:

Pareto Efficient

A distribution of resources where improving the situation of one person cannot be achieved without detriment to another.

Net Benefit

The total positive effects or outcomes of a decision or action minus its total negative effects or costs.

Labor Supply Decisions

The choices individuals make regarding how much labor to supply to the market, influenced by factors such as wages, working conditions, and personal preferences.

Pareto Optimal

A distribution of resources where it's infeasible to enhance the well-being of one individual without adversely affecting another.