The Marginal Propensity to Consume Is Defined as the

question 37

Multiple Choice

The marginal propensity to consume is defined as the

• A) fraction of total income not spent on consumption.
• B) proportion of any change in income that is spent on consumption.
• C) fraction of total income spent on consumption.
• D) fraction of a change in income that is saved.

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Definitions:

Investment Spending

Expenditures made by entities (individuals, companies, or governments) on capital goods, including buildings, machinery, and technology, to increase productivity.

Saving Incentives

Financial or policy incentives designed to encourage individuals or companies to save money rather than spend it.

Interest Rate

The cost of borrowing money, typically expressed as an annual percentage of the principal.

Investment

The action or process of investing money for profit or material result.