If Your Income Is $35,000 and the Average Propensity to Save

question 7

Multiple Choice

If your income is $35,000 and the average propensity to save is 0.46, what is consumption?

• A) $16,100
• B) $18,900
• C) $15,500
• D) $19,500

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Definitions:

Two-Factor Theory

A psychological theory proposing that emotions are based on physiological arousal and cognitive interpretation of that arousal.

Negative Reinforcer

An unpleasant stimulus that, when removed after a response, increases the likelihood of that response occurring in the future.

Classically Conditioned

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Generalized Anxiety Disorder

A mental health disorder characterized by persistent and excessive worry about different aspects of life.