If a Household's Income Falls from $26,000 to $24,000 and Its

question 160

Multiple Choice

If a household's income falls from $26,000 to $24,000 and its savings fall from $1,000 to $500, then its _____

• A) marginal propensity to consume is 0.98.
• B) marginal propensity to consume is 1.33.
• C) marginal propensity to consume is 0.25.
• D) marginal propensity to save is 0.02.
• E) marginal propensity to save is 0.25.

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Definitions:

Night Terrors

A sleep disorder characterized by feelings of terror or dread, usually occurring in the first hours of NREM sleep.

Sleeping Pills

Medications used to facilitate or improve the quality of sleep in individuals with sleep disorders.

REM Sleep

A stage of sleep characterized by rapid eye movements, during which most vivid dreaming occurs.

Alcohol

A psychoactive substance found in beverages such as beer, wine, and spirits, known for its effects on mood, behavior, and health.