If the Marginal Propensity to Consume Is 0

question 59

Multiple Choice

If the marginal propensity to consume is 0.25, it would mean that:

• A) $0.25 of an additional $1 of individuals' after-tax income is spent on consumption.
• B) $0.25 of an additional $1 of individuals' after-tax income is saved.
• C) $0.75 of an additional $1 of individuals' after-tax income is spent on consumption.
• D) None of these are true.

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Definitions:

Historical Significance

The importance or impact that an event, person, or aspect has had on history and its course of development.

Plain Folk

A term describing the average, working-class individuals, especially those living in rural areas or small towns, emphasizing their simplicity and honesty.

Historical Significance

The importance attributed to an event, object, or person in history based on its impact or contribution to the present and future.

Paternalism

A policy or practice of treating or governing people in a fatherly manner, especially by providing for their needs without giving them rights or responsibilities.