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

question 75

Multiple Choice

If income is $50,000, consumption is $47,500, and saving is $2,500, then the average 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:

Parasympathetic Branch

Part of the autonomic nervous system responsible for stimulating "rest-and-digest" or "feed and breed" activities that occur when the body is at rest.

Type A Characteristics

Personality traits including competitiveness, impatience, and a sense of urgency, often linked to stress and heart disease.

Hyperarousal

A condition of increased psychological and physiological tension marked by such effects as reduced pain tolerance, anxiety, and exaggerated startle reflex.

Competitiveness

The characteristic of being eager to be more successful than others, often measured in terms of winning or outperforming rivals in an activity or market.