If the Marginal Propensity to Consume Is 0

question 193

Multiple Choice

If the marginal propensity to consume is 0.5,the income tax rate is 10%,and income rises by $20,000,by how much will consumption spending increase?

• A) $15,000
• B) $10,000
• C) $5,000
• D) $9,000
• E) $1,000

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Definitions:

Learning

A change in behavior, resulting from experience.

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, encouraging or discouraging certain behaviors.

Learning

The acquisition of knowledge or skills through experience, study, or being taught.

Learning

The process of acquiring knowledge, behaviors, skills, values, or preferences, often resulting from study, experience, or teaching.