If Consumption Expenditures for a Household Increase from $1,000 to $1,800

question 402

Multiple Choice

If consumption expenditures for a household increase from $1,000 to $1,800 when disposable income rises from $1,000 to $2,000, the marginal propensity to consume is

• A) 0.8.
• B) 80.
• C) 1.25.
• D) 0.2.

---

Definitions:

Predictive Validity

The extent to which a score on a scale or test predicts future performance or behaviors.

Aptitude Test

A standardized test designed to measure an individual's potential to perform tasks or learn new skills.

Criterion Behavior

Criterion behavior refers to a specific behavior that serves as a standard or reference for evaluating or assessing performance or conditions.

Reciprocal Relationship

A mutual exchange or interaction between two entities, where each party gives and receives something of value.