What Is the Value of the MPC If $66 Out

question 14

Multiple Choice

What is the value of the MPC if $66 out of every $100 increase in disposable income is consumed?

• A) 0.34
• B) $166
• C) $34
• D) 0.66
• E) More information is needed to determine the MPC.

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Definitions:

T-bill

Short-term government securities issued at a discount from the face value and maturing at par, used to finance government debt.

Issue Date

The specific date on which a financial instrument is issued or becomes effective.

Simple Rate of Interest

Interest calculated only on the principal amount of a loan or deposit, without compounding.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically used for the financing of payroll, accounts payable, inventories, and meeting other short-term liabilities.