-Refer to the Table in the Exhibit

question 27

Multiple Choice

-Refer to the table in the exhibit.What does the marginal propensity to consume (MPC) equal?  

• A) 0.20, or 1/5
• B) 0.40, or 2/5
• C) 0.80, or 4/5
• D) 0.90, or 9/10

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Definitions:

Efficient

Achieving maximum productivity with minimum wasted effort or expense; in economics, an allocation of resources in which it is impossible to make any one individual better off without making someone else worse off.

Inefficient

Refers to a situation where resources are not used in the most effective way, leading to waste or suboptimal outcomes.

Efficient Production

The process of producing goods or services in a way that minimizes waste and maximizes the use of resources.

Circular-flow Diagram

An economic diagram that traces the path of monetary transactions between markets, involving both households and business entities.