A Marginal Propensity to Consume of 0

question 4

Multiple Choice

A marginal propensity to consume of 0.8 means the value of the multiplier is

• A) 1.
• B) 2.
• C) 3.
• D) 4.
• E) 5.

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Definitions:

Monthly Interest Rate

The percentage of interest that is charged or earned on a loan or investment over a month's time period.

Credit Policy

A set of guidelines that a company follows to determine credit terms for customers, such as payment period and discount rates.

Discounted Price

Discounted Price refers to a price that has been reduced from the original or listed cost, often to accelerate sale or clearance or as part of promotional offers.

Credit Terms

Credit terms are the payment conditions imposed by suppliers on customers, including the amount of time allowed to pay off the amount due.