Exhibit 8-1 Disposable Income and Consumption Data in Exhibit

question 127

Multiple Choice

Exhibit 8-1 Disposable income and consumption data In Exhibit 8-1, when disposable income (Y) is increased from $0 to $1,000 to $2,000, the marginal propensity to consume:

• A)is 1.
• B)decreases from 0.9 to 0.8.
• C)decreases from 0.8 to 0.7.
• D)increases from 0.8 to 0.9.
• E)is negative.

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Definitions:

Crosstabulation

A method used in quantitative research to summarize categorical data by creating a matrix that displays the frequency distribution of variables to identify relationships between them.

Hidden Variables

Variables that are not directly observed but are relevant or influence the outcome of a process or model.

Two Variables

Refers to any analytical or statistical approach that involves two distinct or dependent variables for examination or study.

Scatter Diagram

A graphical representation of data using Cartesian coordinates to display values for two variables for a set of data, helping to show the relationship between them.