If the Marginal Propensity to Consume (MPC) Is Positive and Less

question 72

Multiple Choice

If the marginal propensity to consume (MPC) is positive and less than one, an increase in disposable income will _____.

• A) increase both consumption and saving
• B) increase consumption and decrease saving
• C) decrease both consumption and saving
• D) decrease consumption but increase saving
• E) increase saving, but we cannot predict what will happen to consumption

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Definitions:

Impliedly Warrants

Indicates a scenario where a warranty is not explicitly stated but is inferred from actions, circumstances, or the nature of a transaction.

Assignor

The party in a contractual agreement who transfers rights or obligations to another, known as the assignee.

Assignee

An individual or entity to whom rights or interests have been transferred by another party, known as the assignor.

Consideration

An essential element in contract law, referring to something of value exchanged between parties as part of entering into a contract.