-The Figure Above Shows a Nation's Consumption Function

question 177

Multiple Choice

-The figure above shows a nation's consumption function.If disposable income is $2 trillion, then the MPC is ________ and saving is ________.

• A) positive; positive
• B) positive; negative
• C) negative; positive
• D) negative; negative
• E) positive; zero

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Definitions:

Bad Debts Expense

An expense reported on the income statement, representing the non-collectable accounts receivable from extending credit to customers.

Allowance for Doubtful Accounts

An estimation of the amount of accounts receivable that is not expected to be collected, used to create a more accurate picture of a company's financial health.

Allowance for Doubtful Accounts

A contra-asset account that represents estimates of receivables that may not be collectible.

Transactions and Events

Transactions refer to the economic activities that impact financial status, and events are occurrences that can affect the company's financial position.