Examlex
Which of the following statements is CORRECT?
Transfer Payments
Payments made by governments to individuals without any expectation of a good or service in return, such as welfare or unemployment benefits.
Marginal Propensity
This measures the likelihood of an individual or entity to spend an additional unit of currency. Specifically, it assesses how changes in income affect spending or saving habits.
Average Propensity
The ratio of total spending (consumption or saving) to total income, indicating how income is distributed across different economic activities.
Marginal Propensity
The measure of how much consumption changes with a change in disposable income, indicating the proportion of additional income that is spent on consumption.
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