The Consumption Schedule Shows

question 147

Multiple Choice

The consumption schedule shows

• A) that the MPC increases in proportion to GDP.
• B) that households consume more when interest rates are low.
• C) that consumption depends primarily on the level of business investment.
• D) the amounts households intend to consume at various possible levels of aggregate income.

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Definitions:

Parent Company

A parent company is a corporation that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors.

Subsidiary Company

A subsidiary company is one that is controlled by another company, typically referred to as the parent company, through ownership of more than half of the subsidiary’s voting stock.

Equity Method

This accounting technique is used for consolidating the financial statements of a company in which the investing company holds significant influence, but not full control or majority ownership.

Dividends Received

Income received by shareholders when a company distributes a portion of its profits to its stockholders.