If the Marginal Propensity to Consume Is 0

question 252

True/False

If the marginal propensity to consume is 0.5, then $50 of every additional $100 of income will be spent.

---

Definitions:

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Accounts Receivable

The money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

NSF Checks

Non-sufficient funds checks, a term used when a check cannot be honored because the drawer's account lacks enough money.

Outstanding Checks

Checks that are recorded in the financial records but haven't been cashed or processed by the bank yet.