Which of the Following Statements Is True

question 43

Multiple Choice

Which of the following statements is true?

• A)With instalment payments on a non-current note payable, the principal portion decreases each period.
• B)With instalment payments on a non-current note payable, the interest portion decreases each period.
• C)With instalment payments on a non-current note payable, the interest portion does not change each period.
• D)With instalment payments on a non-current note payable, the interest portion increases each period.

Calculate saving levels at different points of disposable income.

Understand the concepts of Average Propensity to Save (APS), Average Propensity to Consume (APC), and Marginal Propensity to Save (MPS).

Determine the Marginal Propensity to Consume (MPC) from given consumption data.

Differentiate between autonomous and induced consumption components.

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Definitions:

Negative Externality

A situation where the production or consumption of a good or service results in a harmful effect on unrelated third parties.

Market Equilibrium

Occurs when the quantity of a product demanded by consumers equals the quantity supplied by producers, leading to a stable price.

Socially Optimal Level

An economic condition where resources are allocated in a way that maximizes the overall benefit to society, considering both efficiency and equity.

Regulation

A rule or directive made and maintained by an authority.