If a Person's MPC Is 0

question 77

Multiple Choice

If a person's MPC is 0.75 it means they will:

• A) spend 75 cents of each new dollar they receive.
• B) invest 75 cents of every new dollar they receive.
• C) spend 25 cents and save 75 cents of each additional dollar they earn.
• D) spend 25 percent of any additional money earned.

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Definitions:

Borrowing

The act of obtaining funds from another party, often a financial institution, with a promise to repay the principal amount along with interest or other charges over a period.

All Equity

A financial structure where a company is financed entirely through equity without any debt.

Repurchase Shares

involves a company buying back its own shares from the marketplace, which can reduce the number of outstanding shares and potentially increase the value of remaining shares.

Borrow

The act of receiving funds from a lender under the agreement to return the principal amount plus interest or other charges.