The Change in Consumption Divided by a Change in Income

question 178

Multiple Choice

The change in consumption divided by a change in income is defined as:

• A) the marginal propensity to consume.
• B) autonomous consumption.
• C) the consumption function.
• D) Keynes' absolute income hypothesis.
• E) transitory consumption.

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Definitions:

Fixed Expenses

Costs that do not change with the level of production or sales, remaining constant over a specified period.

Contribution Margin Ratio

A financial metric that measures the proportion of revenue remaining after variable costs have been deducted, indicating how much revenue is available to cover fixed costs and generate profit.

Fixed Expenses

Costs that do not change with the level of production or sales over a short period, such as rent, salaries, and insurance.

Sales Mix

The combination of products or services that a company sells, typically influencing the company's profits and strategy.