If Income Is $50,000, Consumption Is $47,500, and Saving Is

question 144

Multiple Choice

If income is $50,000, consumption is $47,500, and saving is $2,500, then the marginal propensity to consume is:

• A) 0.95.
• B) 0.50.
• C) 0.05.
• D) There is not enough information to answer this question.

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Definitions:

Capital Gain Distributions

Payments to shareholders or fund investors from the sale of securities within the portfolio that have appreciated in value.

Income Distributions

Payments made from a fund or an entity to its shareholders, often derived from interest or dividend income.

NAV

Net Asset Value, the total value of a fund's assets minus its liabilities, often used to price each share of a mutual fund or ETF.

Capital Gain Distributions

Payments made to mutual fund shareholders from the fund's sale of securities that result in a capital gain.