Suppose the Consumption Function Is Given by the Equation C

question 89

Multiple Choice

Suppose the consumption function is given by the equation C = 100 + 0.8YD, where YD is disposable income. What is the marginal propensity to save?

• A) 0.2
• B) 0.8
• C) 2.0
• D) 100

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Definitions:

Perception

The process by which individuals organize and interpret their sensory impressions to give meaning to their environment.

Interpret Information

The process of making sense of or assigning meaning to data and messages received.

Perception Influences

Pertains to how one's understanding and interpretation of the world are affected by personal experiences and biases.

Past Experiences

Events or occurrences from an individual's life that influence their behaviors, decisions, and perceptions in the present.