If Consumption Expenditure for a Household Increases from $300 to $500

question 26

Multiple Choice

If consumption expenditure for a household increases from $300 to $500 when disposable income increases from $200 to $500, the marginal propensity to consume is

• A)equal to 1.
• B)equal to 0.75.
• C)equal to 1.33.
• D)negative.
• E)equal to 0.67.

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Definitions:

Correlation Coefficient

A statistical measure that indicates the extent to which two or more variables fluctuate together.

Correlational Approach

A nonexperimental method in which the researcher merely observes whether variables are associated or related.

Field Experiment

A study conducted in a real-world setting where the researcher manipulates one or more variables to observe their effect on a specific outcome.

Meta-analysis

A statistical technique that combines the results of multiple scientific studies to obtain a more precise effect size of the results.