Fixed Costs Are Expenses That Are Not Affected by Consumer

question 51

True/False

Fixed costs are expenses that are not affected by consumer demand, so they can be estimated without an estimate of that demand when doing multinational capital budgeting.

---

Definitions:

Western Europe

A region comprising countries located in the western part of the European continent, often associated with developed economies and democratic governance.

Disposable Income

Income remaining after deduction of taxes and social security charges, available to be spent or saved as one wishes.

APC

Average Propensity to Consume, which measures the fraction of income that households spend on consumption rather than saving.

MPS

Stands for Marginal Propensity to Save, which is the ratio of the change in savings to the change in disposable income. It indicates how much of an additional income unit is saved rather than spent.