Suppose the Consumption Function Is Given by the Equation C

question 104

Multiple Choice

Suppose the consumption function is given by the equation C = 100 + 0.8YD, where YD is disposable income. What is the marginal propensity to save?

• A)100
• B)0.8
• C)2.0
• D)0.2

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Definitions:

Declaration Date

The specific date on which a company's board of directors announces its next dividend payment or stock dividend.

Legal Obligation

A duty enforced by law, requiring an entity or individual to perform or refrain from performing a certain action.

Date of Record

The date set by a corporation upon which the shareholders must be registered to be eligible to receive dividends or participate in corporate voting.

Common Stock

A type of equity security that represents ownership in a corporation, with holders having a claim on part of the company's assets and earnings.