If the Marginal Propensity to Consume Is 0

question 205

Multiple Choice

If the marginal propensity to consume is 0.9 and income increases from $10,000 to $11,000, by how much does consumption increase?

• A) $100
• B) $900
• C) $1,000
• D) $11,000

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Definitions:

Collateral Position

The assets that a borrower offers to a lender as security for the repayment of a loan, potentially forfeited in case of default.

Disbursement of Funds

The act of paying out money from a fund or account to cover expenses or investments.

Collateral Position

Collateral is property or assets that a borrower offers to a lender as security for a loan, which can be taken by the lender if the borrower fails to repay.

Stretching Payables

Paying invoices after they’re due according to the terms of sale. Also called leaning on the trade.