Which of the Following Lines Has a Slope Equal to the Marginal

question 57

Multiple Choice

Which of the following lines has a slope equal to the marginal propensity to consume?

• A) The demand for loanable funds curve
• B) The labor demand curve
• C) The consumption function
• D) Inventory line
• E) The 45-degree line

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Definitions:

Debt Ratio

A financial ratio that measures the extent of a company’s leverage, calculated by dividing total liabilities by total assets.

Capital Structure

The mixture of debt and equity that a company uses to finance its operations and growth.

ROE

Return on Equity; a financial ratio that measures the profitability of a firm by dividing net income by shareholder's equity.

Days Sales Outstanding

A measure that calculates the average time it takes for a company to collect payments after a sale has been made.