The Short-Run Marginal Propensity to Consume Can Be Derived Statistically

question 50

Multiple Choice

The short-run marginal propensity to consume can be derived statistically by calculating how

• A) the level of consumption responds to changes in the level of disposable income.
• B) changes in consumption respond to changes in disposable income from year to year.
• C) consumption is correlated to disposable income on a quarterly basis.
• D) changes in consumption of less durable goods respond to changes in disposable income.
• E) none of the above.

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Definitions:

Target

In the business context, it generally refers to a specific objective or goal that a company or individual aims to achieve.

Operating Costs

Operating costs, or operating expenses, are the costs required for the day-to-day maintenance and administration of a business.

Financial Position

The status of a company or individual's assets, liabilities, and equity at a specific point in time, summarizing the economic resources and obligations.

EBIT

Earnings Before Interest and Taxes - a measure of a firm's profitability that excludes interest and income tax expenses.