If Consumption Increases by $9 When Disposable Income Increases by $10

question 145

Multiple Choice

If consumption increases by $9 when disposable income increases by $10, the marginal propensity to consume (mpc) equals:

• A)0.1.
• B)0.9.
• C)1.0.
• D)9.0.

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Definitions:

Individual Performance

The measure of the efficiency and effectiveness of an employee's work activities and outputs.

Sales Commissions

A compensation method in which sales professionals are paid a percentage of the sales they generate.

Profit-Sharing Plans

A type of incentive plan that gives employees a share in the company’s profits based on its quarterly or annual earnings, promoting a sense of ownership and participation.

Merit-Pay Plans

Pay-for-performance plans where employees receive salary increases or bonuses based on their performance evaluations.