The MPS Equals the Ratio of

question 84

Multiple Choice

The MPS equals the ratio of

• A) saving to real GDP.
• B) the change in saving to the change in consumption expenditure.
• C) saving to consumption expenditure.
• D) None of the above answers is correct.

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Definitions:

Cost of Capital

The yield a business needs to achieve on its investments to keep its market price stable and draw in capital.

Cash Flows

Cash flows refer to the net amount of cash and cash-equivalents being transferred into and out of a business.

Stand-Alone Project

A project considered and evaluated independently from other projects, focusing on its own merits without consideration for its interaction with other initiatives.

Capital Budgeting

The process by which a business evaluates and selects long-term investment projects.