If the Marginal Propensity to Consume Is 0

question 72

True/False

If the marginal propensity to consume is 0.80, the value of the spending multiplier will be 5.

---

Definitions:

Operating Expenses

Costs necessary for a company to conduct its day-to-day operations, excluding the cost of goods sold (COGS).

Transfer Prices

Prices charged for the sale of goods or services between divisions within the same company, often used for cost allocation and performance evaluation.

Segments

Different parts or areas of a business or market that can be separately analyzed.

ROI

Return on Investment is a measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.