If the Consumption Schedule Is Linear, Then the

question 98

Multiple Choice

If the consumption schedule is linear, then the

• A) saving schedule will also be linear.
• B) MPS will decline as income rises.
• C) MPC will decline as income rises.
• D) APC will be constant at all levels of income.

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Definitions:

Total Investment

The sum of all expenditures on capital assets, including stocks, bonds, real estate, and physical goods, within a specific period.

Opportunity Cost

The price of missing out on the next best option while making a choice or deciding between various possibilities.

Borrowed Funds

Capital that is obtained through loans or credit, typically for investment or expenditures, that needs to be repaid.

Retained Earnings

The portion of a company's profits not distributed to shareholders as dividends but instead reinvested in the business or kept as reserve.