The Sum of the Marginal Propensity to Consume (MPC)and the Marginal

question 111

Multiple Choice

The sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) equals:

• A)0.5.
• B)the multiplier.
• C)the slope of the consumption function.
• D)1.0.
• E)the slope of the saving function.

---

Definitions:

Fixed Asset Turnover

A financial ratio that measures a company's efficiency in using its fixed assets to generate sales.

Accelerated Depreciation

A depreciation method that allows for a higher depreciation charge in the early years of an asset's life and less in the later years.

Depreciable Assets

Assets subject to depreciation, reflecting the reduction in value due to wear and tear, decay, or decline in usefulness over time.

Cash Flow

The net amount of cash being transferred into and out of a business, which is used to maintain the company's operations.