Which of the Following Is a Reason for a Decrease

question 119

Multiple Choice

Which of the following is a reason for a decrease in the average propensity to consume with an increase in income?

• A) The amount of savings decreases, and the consumption of necessities increases.
• B) The expenditure on luxury goods increases, and the amount of savings decreases.
• C) The expenditure on luxury goods represents only a small portion of income.
• D) The amount of savings represents only a small portion of income.
• E) The cost of necessities represents only a small portion of income.

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Definitions:

Prompt Payment

The practice of paying invoices on time, which can help build good relationships with suppliers and might qualify the payer for discounts.

Lower Price

The reduction of cost or charge for a product or service, making it more affordable.

Performance Bond

A bond issued by a bank or insurance company that guarantees satisfactory completion of a project by a contractor, mitigating risk for the project owner.

Indemnified

means being protected or secured against financial loss or other liabilities, often through insurance or contractual agreement.