If 100 Percent of Any Change in Income Is Spent

question 54

Multiple Choice

If 100 percent of any change in income is spent, the multiplier will be

• A) equal to the MPC.
• B) 1.
• C) zero.
• D) infinitely large.

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Definitions:

Securities Analysis

A systematic approach to valuing securities, especially stocks, by studying an issuing firm’s business and industry. The securities analyst plays an important role in the financial industry.

Dividends

Sum disbursed by a business to its shareholders, indicative of a fraction of the business's profit.

Contractual Agreement

A legally binding agreement between two or more parties outlining duties, terms, and conditions that those parties have agreed upon.

Bonds And Stocks

Financial instruments where bonds represent loans to an entity that pays periodic interest, and stocks represent ownership shares in a corporation.