The Marginal Propensity to Consume (MPC) Equals the Change in _____

question 41

Multiple Choice

The marginal propensity to consume (MPC) equals the change in _____ divided by the change in _____.

• A) consumer spending; disposable income
• B) consumer spending; investment spending
• C) consumer spending; gross domestic product
• D) disposable income; consumer spending

---

Definitions:

Generally Accepted Accounting Principles

The standard framework of guidelines for financial accounting used in any given jurisdiction; commonly known as GAAP.

Inventory Level

The quantity of goods and materials on hand available for sale or production at any given time.

Production Levels

The quantity of goods or services produced within a given period by a company, industry, or sector.

Net Working Capital

It's the disparity between what a business owns in the short term and what it owes, reflecting its financial well-being and effectiveness in managing day-to-day operations.