If Disposable Income Is $900 Billion When the Average Propensity

question 120

Multiple Choice

If disposable income is $900 billion when the average propensity to consume is 0.9, it can be concluded that

• A) the marginal propensity to consume is also 0.9.
• B) the marginal propensity to save is 0.1.
• C) consumption is $900 billion.
• D) saving is $90 billion.

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Definitions:

Flexibility

The capacity to adapt to changing conditions or circumstances in a business or operational context.

Useful Output

The amount of finished product or completed service that is produced and considered of value to the consumer or market.

Special Journals

Customized accounting journals used for recording specific types of transactions in detail, such as sales or purchases.

Cash Receipts Journal

An accounting journal specifically for all cash inflows or receipts, including sales, loan proceeds, and interest earned.