If the Marginal Propensity to Consume Is Very Close to Zero

question 62

Multiple Choice

If the marginal propensity to consume is very close to zero, then the expenditure multiplier

• A) is very close to zero.
• B) is very close to one.
• C) is very large.
• D) cannot be calculated.
• E) might be negative if the marginal tax rate is large enough.

Understand Thorndike's contributions to psychology and the principle of the law of effect.

Recognize the process of classical conditioning and its effects on behavior.

Differentiate between classical and operant conditioning.

Identify the role of reinforcement in learning and behavior modification.

---

Definitions:

Market Value

The present cost at which a service or asset is available for purchase or sale in a market setting.

Replacement Cost

The current cost to replace an asset with a similar one of equivalent utility and quality, without considering depreciation.

Selling Price

The amount of money for which a product or service is sold to customers.

Insurance Expense

Insurance expense refers to the cost incurred by an entity to obtain coverage against various risks, recorded as an expense in the financial statements.