Data on After-Tax Income and Consumption Spending for the Adam

question 50

Multiple Choice

Data on after-tax income and consumption spending for the Adam Smith family are given below: Based on these data, the Adam Smith family has a marginal propensity to consume equal to:

• A)0.9.
• B)0.8.
• C)0.75.
• D)0.6.

---

Definitions:

Accounting Services

Professional services related to the maintenance and auditing of financial records and preparation of financial reports.

Advertising Expense

This refers to the costs a business incurs for marketing and promoting its products or services.

Common Stock

A type of equity security that represents ownership in a corporation, with holders possibly entitled to vote on corporate matters and receive dividends.

Equipment

Tangible assets used in operations, such as machinery, computers, and furniture, which are expected to be used over several years.