If the Marginal Propensity to Consume Were 0

question 5

Multiple Choice

If the marginal propensity to consume were 0.9 and a constant 20 percent tax were applied to all income, then an increase in income of $10 would cause consumption expenditure to climb by

• A) 72 percent.
• B) $0.72.
• C) $7.20.
• D) $9.00.
• E) $8.00.

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Definitions:

Adoption

The act of starting to use, support, or incorporate something new, such as a technology, idea, or practice.

Awareness Stage

The initial phase of the marketing funnel where potential customers first become acquainted with a product or brand.

Adoption

The act of legally taking another's child and bringing it up as one's own or embracing ideas, methods, or innovations.

Internalization

The process of integrating or absorbing knowledge, beliefs, values, or behaviors into one's own perspective or organizational practices.