The Marginal Propensity to Consume

question 145

Multiple Choice

The marginal propensity to consume

• A)is negative if dissaving is present.
• B)is greater than 1 if dissaving is present.
• C)is between 1/2 and 1.
• D)is greater than 1 but less than 2.
• E)is between zero and 1.

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Definitions:

Expected Return

Expected return is the anticipated average return of an investment over a specified period, taking into account both expected gains and potential losses.

Required Return

The Required Return is the minimum expected return an investor anticipates on an investment to make it worthwhile, encompassing the risk-level associated with the investment.

Marginal Investor

An investor whose actions and choices at the margin are believed to determine the price of a stock.

Common Share

A type of equity security that represents ownership in a corporation and entitles the holder to vote at shareholders' meetings.