(Advanced Analysis) Assume the Following Consumption Schedule: C = 20

question 8

Multiple Choice

(Advanced analysis) Assume the following consumption schedule: C = 20 + 0.9Y, where C is consumption and Y is disposable income. The MPC is

• A) 0.45.
• B) 0.20.
• C) 0.50.
• D) 0.90.

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Definitions:

Straight-Line Method

A depreciation technique where an equal amount of depreciation expense is allocated for each year of the asset's useful life.