The Propensity to Consume Represents

question 27

Multiple Choice

The propensity to consume represents:

• A) the change in output caused by a one- unit change in autonomous demand.
• B) the level of consumption that occurs if disposable income is zero.
• C) the ratio of total consumption to disposable income.
• D) the change in consumption caused by a one- unit change in disposable income.
• E) total income minus total taxes.

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Definitions:

Functional Currency

The currency of the primary economic environment in which an entity operates, typically used to record its financial transactions.

Consolidated Balance Sheet

A financial statement that aggregates the assets, liabilities, and equity of a parent company and its subsidiaries.

U.S. Dollars

The official currency of the United States, often symbolized as $.

Temporal Method

An accounting method used to translate foreign currency balances when the exchange rate fluctuates significantly, converting monetary items at the exchange rate of the transaction date.