If the Marginal Propensity to Consume Is 0

question 225

Multiple Choice

If the marginal propensity to consume is 0.9, then the marginal propensity to save must be

• A) 1.0
• B) 0.1.
• C) 1.1.
• D) 0.9.

---

Definitions:

Profitability

The ability of a firm to earn income.

Days' Sales

A financial metric that compares a company's average receivables to its average daily sales, indicating how fast the company collects payments from customers.

Inventory

The total quantity of goods and materials a business holds for the purpose of resale or production.

Cost of Goods Sold

The total cost of manufacturing or purchasing the products a company has sold during a specific period.