What Is the Value of the MPC If $66 Out

question 232

Multiple Choice

What is the value of the MPC if $66 out of every $100 increase in disposable income is consumed?

• A) 0.66
• B) $166
• C) 0.34
• D) $34
• E) More information is needed to determine the MPC.

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Definitions:

Normal Credit Balance

The usual balance side of an account that increases its value, typically used for liabilities, revenues, and equity accounts.

Withdrawals

Money taken out from a business by its owner(s) for personal use, reducing the owner's equity in the business.

Assets

Economic resources owned by a business or individual that are expected to benefit future operations.

Expenses

Financial outlays or obligations incurred by a company as part of its operational activities, leading to a reduction in owners' equity.